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Item 1. Business

2023-03-29 compared with 2022-03-30 · 1348 added, 1329 removed, 163 unchanged (94% of the section changed)

are a clinical stage microbiome product discovery company developing products using both natural and engineered phage technologies designed

to target and kill specific harmful bacteria associated with chronic diseases, such as cystic fibrosis, or CF, atopic dermatitis, or

AD, inflammatory bowel disease, or IBD, primary sclerosing cholangitis, or PSC and colorectal cancer, or CRC.

Bacteriophage or phage

are bacterial, species-specific, strain-limited viruses that infect, amplify and kill the target bacteria and are considered inert to

mammalian cells.

By utilizing proprietary combinations of naturally occurring phage and by creating novel phage using synthetic biology,

we develop phage-based therapies intended to address both large-market and orphan diseases.

microbiome refers to the collection of microorganisms, including phage, that reside on the skin, line the gastrointestinal tract and

reside elsewhere in the body.

The vast majority of these microorganisms are not pathogenic and instead exist in a symbiotic state with

the human host, enabling the body to function normally by protecting against proliferation of pathogenic strains, educating the immune

system and assisting in digestion.

Imbalances in the composition of the microbiome have been found in multiple diseases.

approach in our therapeutic programs is based on targeting those specific strains of pathogenic bacteria in the microbiome that are strongly

associated with diseases while leaving the rest of the microbiome intact.

Our goal is to restore the natural, healthy balance of the

microbiome with rationally designed phage cocktails.

Using our proprietary methods, we can generate and screen large libraries of phage,

prioritizing potential candidates based on selectivity and potency as well as a number of other parameters, that are important for drug

development such as safety, stability and manufacturability.

goal is to develop multiple products based on the ability of phage to precisely target components of the microbiome and on our ability

to screen, identify and combine different phage, both naturally occurring and created using synthetic engineering, to develop these treatments.

Product Pipeline

chart below identifies our product candidates’ pipeline, their current status and expected timing for the upcoming milestones.

We do not have any products approved or available for sale, our product candidates are still in the preclinical and clinical development

stages, and we have not generated any revenue from product sales.

(1) In November 2020, we

announced the consolidation of our IBD and PSC programs to develop one broad host range product candidate for both IBD and PSC,

designated BX003 (replacing a previous phage product candidate for IBD named BX002)

– Treatment of Cystic Fibrosis

is our therapeutic phage product candidate under development for chronic respiratory infections caused by Pseudomonas aeruginosa,

aeruginosa, a main contributor to morbidity and mortality in patients with CF.

Enhanced resistance to antibiotics develops,

particularly in CF patients, due to extensive drug use consisting of prolonged and repeated broad-spectrum antibiotic courses often beginning

in childhood, and leading to the appearance of multidrug-resistant strains.

In preclinical in vitro studies, BX004 was shown to

be active against antibiotic resistant strains of P.

aeruginosa and demonstrated the ability to penetrate biofilm, an assemblage

of surface-associated microbial cells enclosed in an extracellular polymeric substance and one of the leading causes for antibiotic resistance.

We are a clinical stage product discovery company

developing products using both natural and engineered phage technologies designed to target and kill specific harmful bacteria associated

with chronic diseases, such as cystic fibrosis, or CF.

Bacteriophage or phage are bacterial, species-specific, strain-limited viruses

that infect, amplify and kill the target bacteria and are considered inert to mammalian cells.

By utilizing proprietary combinations of

naturally occurring phage and by creating novel phage using synthetic biology, we develop phage-based therapies intended to address both

large-market and orphan diseases.

In our therapeutic programs, we focus on using phage

therapy to target specific strains of pathogenic bacteria that are associated with diseases.

Our phage-based product candidates are developed

utilizing our proprietary research and development platform named BOLT.

The BOLT platform is unique, employing cutting edge methodologies

and capabilities across disciplines including computational biology, microbiology, synthetic engineering of phage and their production

bacterial hosts, bioanalytical assay development, manufacturing and formulation, to allow agile and efficient development of natural or

engineered phage combinations, or cocktails.

The cocktail contains phage with complementary features and is optimized for multiple characteristics

such as broad target host range, ability to prevent resistance, biofilm penetration, stability and ease of manufacturing.

Our goal is to develop multiple products based on the

ability of phage to precisely target harmful bacteria and on our ability to screen, identify and combine different phage, both naturally

occurring and created using synthetic engineering, to develop these treatments.

Our Product Pipeline

below identifies our product candidates’ pipeline, their current status and expected timing for the upcoming milestones.

not have any products approved or available for sale, our product candidates are still in the preclinical and clinical development stages,

and we have not generated any revenue from product sales.

Ongoing Programs

BX004 – Treatment of Cystic Fibrosis

BX004 is our therapeutic phage product candidate

under development for chronic pulmonary infections caused by Pseudomonas aeruginosa, or P.

aeruginosa, a main contributor

to morbidity and mortality in patients with CF.

Enhanced resistance to antibiotics develops, particularly in CF patients, due to extensive

drug use consisting of prolonged and repeated broad-spectrum antibiotic courses often beginning in childhood, and leading to the appearance

of multidrug-resistant strains.

In preclinical in vitro studies, BX004 was shown to be active against antibiotic resistant strains

aeruginosa and demonstrated the ability to penetrate biofilm, an assemblage of surface-associated microbial cells enclosed

in an extracellular polymeric substance and one of the leading causes for antibiotic resistance.

The Phase 1b/2a trial in CF patients with chronic

respiratory infections caused by P.

will be comprised of two parts.

Part 1 will evaluate the safety, pharmacokinetics

and microbiologic/clinical activity of BX004 in eight CF patients in a single ascending dose and multiple ascending dose design.

design is based on recommendations from the Cystic Fibrosis Therapeutic Development Network.

Results from Part 1 are expected in the third

quarter of 2022.

Part 2 of the Phase 1b/2a trial will evaluate the safety and efficacy of BX004 in 24 CF patients randomized to a treatment

or placebo cohort in a 2:1 ratio.

Results from Part 2 are expected by the first quarter of 2023.

In September 2021, the FDA allowed us to initiate

the Phase 1b/2a trial of BX004 in CF patients with chronic respiratory infections caused by P.

January 2022, we announced that we received an award of up to $5 million from the Cystic Fibrosis Foundation, or CF Foundation, in two

The first tranche of $3 million, was received on December 21, 2021, as an equity investment.

Upon completion of patient dosing

in Part 1 of our Phase 1b/2a study of BX004 we will have the right to receive the second tranche of $2 million, also as an equity investment.

is comprised of two parts.

The study design is based on recommendations from the

Cystic Fibrosis Therapeutic Development Network.

In February 2023, we announced positive results

from Part 1 of the Phase 1b/2a trial evaluating BX004.

Part 1 evaluated the safety, tolerability, pharmacokinetics, or PK, and microbiologic

activity of BX004 over a 7-day treatment period in nine CF patients (7 on BX004, 2 on placebo) with chronic P.

aeruginosa pulmonary infection

in a single ascending dose and multiple dose design.

Results from Part 1 of the Phase 1b/2a trial included

the following findings:

No safety events related to treatment with BX004 occurred;

aeruginosa colony forming units (CFU) at Day

15 (compared to baseline):

-1.42 log (BX004) vs.

-0.28 log (placebo).

This reduction was seen on top of standard of care inhaled antibiotics;

Phage were detected in all patients treated with BX004 during the dosing period, including in several patients up to Day 15 (one week

after end of therapy);

no phage were detected in patients receiving placebo;

there was no emerging resistance to BX004 during or after

treatment with BX004;

and there was no detectable effect on % predicted FEV1.

Part 2 of the Phase 1b/2a trial will evaluate the safety

and efficacy of BX004 in 24 CF patients randomized to a treatment or placebo cohort in a 2:1 ratio.

Results from Part 2 are expected in

the third quarter of 2023.

In January 2022, we announced that we received an award

of up to $5 million from the Cystic Fibrosis Foundation, or CF Foundation, in two tranches.

The first tranche of $3 million, was received

on December 21, 2021, as an equity investment.

Upon completion of patient dosing in Part 1 of our Phase 1b/2a study of BX004 we had the

right to receive the second tranche of $2 million, also as an equity investment.

Following the results from Part 1 of the ongoing

Phase 1b/2a trial, the CF Foundation agreed to make its second tranche investment of $2 million through its participation in the Company’s

$7.5 million private placement.

The funding provided by the CF Foundation will be used to support the development of BX004.

– Treatment of Atopic Dermatitis

is our topical phage product candidate targeting Staphylococcus aureus , or S.

aureus , a bacterium associated with the development

and exacerbation of inflammation in atopic dermatitis.

aureus is more abundant on the skin of atopic dermatitis patients

than on the skin of healthy individuals and on lesional skin than non-lesional skin.

It also increases in abundance, becoming the dominant

bacteria, when patients experience flares.

BX005 – Treatment of Atopic Dermatitis

BX005 is our topical phage product candidate targeting

Staphylococcus aureus , or S.

aureus , a bacterium associated with the development and exacerbation of inflammation in atopic

aureus is more abundant on the skin of atopic dermatitis patients than on the skin of healthy individuals and

on lesional skin than non-lesional skin.

It also increases in abundance, becoming the dominant bacteria, when patients experience flares.

By reducing the load of S.

aureus , BX005 is designed to shift the skin microbiome

composition to its ‘pre-flare’ state and potentially provide a clinical benefit.

In preclinical in vitro studies,

BX005 was shown to eradicate over 90% of strains, including antibiotic resistant strains, from a panel of S.

aureus strains (120

strains isolated from skin of subjects from the U.S.

aureus , BX005 is designed to shift the skin microbiome composition to its ‘pre-flare’

state and potentially provide a clinical benefit.

In preclinical in vitro studies, BX005 was shown to eradicate over 90% of strains,

including antibiotic resistant strains, from a panel of S.

aureus strains (120 strains isolated from skin of subjects from the

We are currently supporting a range of pre-clinical

activities to move this program forward and working on evaluating timelines for a clinical trial.

On April 8, 2022, the FDA approved the Company’s

IND application for BX005.

In October 2021, we entered into a stock purchase

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The right of first offer will

commence following the availability of results from the Phase 1/2 study expected in the fourth quarter of 2022.

– Treatment of IBD and PSC

November 12, 2020, we announced consolidation of our IBD and PSC programs into a single broad host range product candidate, named BX003,

under development for both indications.

Prior to November 2020, we had two separate phage product candidates for IBD and for PSC, with

our IBD product candidate named BX002 and PSC product candidate named BX003.

After the consolidation, the BX003 product candidate was

under development to treat both IBD and PSC, targeting bacterial strains of Klebsiella pneumoniae , or K.

pneumoniae , a

potential pathogen implicated in both diseases.

pneumoniae strains isolated from IBD patients were shown to be pro-inflammatory

in animal models and may have a role in the onset and aggravation of the disease.

Strains of K.

pneumoniae isolated from PSC patients

were shown to cause an inflammatory response in the liver of animal models and were shown to induce the formation of pores through monolayer

colonic organoid cultures.

Prior to the consolidation, our Phase 1a clinical study was conducted only on BX002, and future clinical studies

are planned to be conducted on BX003.

On February 2, 2021, we announced positive results

of a randomized, single-blind, multiple-dose, placebo-controlled Phase 1a pharmacokinetic study of BX002, our product candidate for IBD

and PSC, conducted under an investigational new drug application, or IND, submitted to the FDA.

The study evaluated the safety and tolerability

of orally administered BX002 in 18 healthy volunteers.

Subjects were randomized to receive orally either BX002 or placebo, twice daily

for three days.

Subjects were monitored for safety for seven days in a clinical unit, with follow-up for safety assessments done at 14

and 28 days after completion of dosing.

BX002 was demonstrated to be safe and well-tolerated, with no serious adverse events and no adverse

events leading to discontinuation.

In addition, the study met its objective of delivering high concentrations of viable phage to the gastrointestinal

tract of approximately 10 10 PFU, or plaque forming units.

This equals approximately 1,000 times more viable phage compared

to the bacterial burden of K.

pneumoniae in IBD and PSC patients as measured in stool.

Based on the Phase 1a study results, we

plan to advance to a Phase 1b/2a study evaluating the efficacy of BX003 for the reduction of K.

pneumoniae in individuals that

carry the target bacteria.

On November 15, 2021, we announced that we plan

to temporarily pause the development efforts in BX003 until early 2023.

We are also developing synthetically engineered

phage designed to target strains of bacteria found in CRC tumors.

Our CRC program integrates expertise in identifying and validating associations

of specific strains of bacteria with human disease and synthetic biology capabilities enabling design of phage that are expected to deliver

therapeutic payloads to tumors.

Only a small percentage of the new cases of CRC respond to immunotherapy.

This lack of response is believed

to be due to the lack of novel tumor antigens and scarcity of immune cells in colorectal tumors.

We have observed in vitro and

in vivo that phage can be used to target strains of Fusobacterium nucleatum , a bacterial species that is highly enriched

in colorectal tumors and is believed to be pathogenic.

We plan to use phage intravenously to deliver payload genes, such as those encoding

immunostimulatory proteins, to tumors while also leading to eradication of these bacteria.

We have successfully engineered an IL-15 gene

payload into F.

commence following the availability of results from the Phase 1/2 study.

Programs on hold

BX003 – Treatment of IBD and PSC

In November 2020, we combined our inflammatory bowel

disease, or IBD and primary sclerosing cholangitis, or PSC programs to create a single product candidate called BX003, which targets K.

pneumoniae to treat both diseases.

Previously, we had separate candidates named BX002 and BX003.

In February 2021, a Phase 1a pharmacokinetic

study of BX002 demonstrated that it was safe and well-tolerated with no serious adverse events, and with high concentrations of viable

phage delivered to the gastrointestinal tract.

On November 15, 2021, we announced that we have paused

development efforts for BX003 due to prioritizing resources towards our CF and AD programs, and we cannot provide guidance on resuming

its development.

We are developing synthetically engineered phage to

target bacteria found in colorectal tumors.

We observed in vitro and in vivo that phage can be used to target Fusobacterium nucleatum,

which is commonly found in colorectal tumors.

Our goal is to use phage to deliver payload genes, such as those encoding immunostimulatory

proteins, to tumors and eradicate the bacteria.

We have successfully engineered an IL-15 gene into F.

nucleatum phage.

On November 15, 2021, we announced that we plan to temporarily pause the development efforts in

CRC until early 2023.

– Treatment of acne

developed BX001, our product candidate to modify the appearance of skin in a range of skin types, including oily and acne-prone skin.

BX001 is a topical gel that includes a combination of naturally occurring phage that specifically target Cutibacterium acnes, or

March 31, 2020, we announced positive topline results from a 4-week randomized, double-blind, dose-finding, placebo-controlled single

center Phase 1 cosmetic clinical study of BX001.

The 75 enrolled individuals with mild-to-moderate acne were randomized into one of three

a high dose cohort, a low dose cohort, and a placebo cohort (vehicle).

The study met its primary endpoints of safety and tolerability

for both doses of BX001, in addition to demonstrating a statistically significant (p=0.036) reduction of C.

acnes levels for the high

dose of BX001 compared to placebo.

On October 18, 2021, we announced the results of

a Phase 2 clinical study of BX001.

The study was a 12-week randomized, single center, double-blind, placebo-controlled trial in 140 women

with mild-to-moderate acne vulgaris.

Subjects were randomized into two cohorts:

BX001 or placebo in a 1:1 ratio and self-administered

BX001 or placebo twice daily.

Key endpoints from the study evaluated the safety, tolerability and efficacy of BX001.

BX001 was well-tolerated

with no treatment-related adverse events.

A statistically significant improvement from baseline was observed in appearance of acne-prone

skin but no meaningful difference was demonstrated relative to the placebo arm of the Study.

Following such results we decided not to

continue pursuing this program.

goal is to develop multiple products based on the ability of phage to precisely target components of the microbiome and on our ability

to screen, identify and optimally combine different phage, both naturally occurring and generated using synthetic engineering, to develop

these treatments.

On November 15, 2021, we announced that we have paused

development efforts for this program due to prioritizing resources towards our CF and AD programs, and we cannot provide guidance on resuming

its development.

Discontinued programs

BX001 – Treatment of Acne

BX001 is a topical gel developed to modify skin appearance

in a range of skin types, including acne-prone skin, using naturally occurring phage that target Cutibacterium acnes, or C.

A 4-week Phase 1 clinical study demonstrated that BX001 was safe, well-tolerated, and significantly reduced C.

acnes levels for

the high dose compared to the placebo.

A 12-week Phase 2 clinical study on 140 women with mild-to-moderate acne vulgaris found that BX001

was well-tolerated, and a statistically significant improvement in the appearance of acne-prone skin was observed.

However, there was

no meaningful difference demonstrated compared to the placebo arm of the study.

As a result, we decided to discontinue the program.

Our goal is to develop multiple products based on the

ability of phage to precisely target harmful bacteria and on our ability to screen, identify and optimally combine different phage, both

naturally occurring and generated using synthetic engineering, to develop these treatments.

We intend to continue to:

Investigate clinical safety and efficacy of our lead

phage-based product candidates in CF and AD, as well as in IBD/PSC;

Identify new pathogenic bacteria to be targeted by

phage therapy for our existing indications and possible new indications;

Develop and partner microbiome-based biomarker tests,

based on our proprietary XMarker platform, that can be used for disease diagnosis or as companion diagnostics;

Evaluate the preclinical activity of our synthetic

engineering approach for delivering therapeutic payloads to bacteria that are resident within CRC tumors followed by evaluation through

clinical testing.

phage discovery platform

approach is driven by the convergence of several factors:

a rapidly increasing understanding of phage, including the links between phage

behaviors and their genomes;

growing evidence that the presence of specific harmful bacteria may impact chronic diseases, such as CF,

making them in principle, amenable to treatment with phage;

and by a growing number of anecdotal reports from different academic centers

of successful compassionate use of phage to treat seriously ill patients who were unresponsive to other therapies.

We believe our phage

therapeutic product candidates have the potential to treat conditions and diseases by precisely targeting pathogenic bacteria without

disrupting elements of the healthy microbiota.

phage-based product candidates are developed utilizing our proprietary research and development platform named BOLT.

The BOLT platform

is unique, employing cutting edge methodologies and capabilities across disciplines including computational biology, microbiology, synthetic

engineering of phage and their production bacterial hosts, bioanalytical assay development, manufacturing and formulation, to allow agile

and efficient development of natural or engineered phage combinations, or cocktails.

BOLT is designed to allow rapid phage cocktails.

The BOLT cocktail targets a broad patient population and may be comprised of naturally-occurring or synthetically engineered phage.

cocktail contains phage with complementary features and is further optimized for multiple characteristics such as broad target host range,

ability to prevent resistance, biofilm penetration, stability and ease of manufacturing.

Development of the optimized phage cocktail is

anticipated to require 1-2 years.

● Investigate clinical safety

and efficacy of our lead phage-based product candidates in CF;

Identify new pathogenic bacteria to be targeted by phage therapy for our existing indications and possible new indications;

Develop and partner microbiome-based biomarker tests, based on our proprietary XMarker platform, that can be used for disease diagnosis or as companion diagnostics.

Our phage discovery platform

Our approach is driven by the convergence of several

a rapidly increasing understanding of phage, including the links between phage behaviors and their genomes;

growing evidence

that the presence of specific harmful bacteria may impact chronic diseases, such as CF, making them in principle, amenable to treatment

and by a growing number of anecdotal reports from different academic centers of successful compassionate use of phage to treat

seriously ill patients who were unresponsive to other therapies.

We believe our phage therapeutic product candidates have the potential

to treat conditions and diseases by precisely targeting pathogenic bacteria without disrupting elements of the healthy microbiota.

Our phage-based product candidates are developed

utilizing our proprietary research and development platform named BOLT.

The BOLT platform is unique, employing cutting edge methodologies

and capabilities across disciplines including computational biology, microbiology, synthetic engineering of phage and their production

bacterial hosts, bioanalytical assay development, manufacturing and formulation, to allow agile and efficient development of natural or

engineered phage combinations, or cocktails.

BOLT is designed to allow the rapid development of

optimized phage cocktails.

These cocktails may be comprised of naturally-occurring or synthetically engineered phage.

The cocktail contains

phage with complementary features and is optimized for multiple characteristics such as broad target host range, ability to prevent resistance,

biofilm penetration, stability and ease of manufacturing.

Pre-clinical development of the optimized phage cocktail is anticipated to require

combine multiple technologies that originate from the laboratories of our scientific founders and that were developed internally.

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Biology Group in the Department of Electrical Engineering and Computer Science and the Department of Biological Engineering at the Massachusetts

Institute of Technology, or MIT.

In addition, through the acquisition of the privately held Israel-based company, RondinX Ltd.

we gained access to high throughput genomic analyses techniques developed by Professor Eran Segal, a leading computational biologist

from the Department of Computer Science and Applied Mathematics at the WIS.

The combination of the technologies and expertise from these

leaders in each of their respective fields is critical in enabling us to focus on treating complex human diseases and conditions by precise

manipulation of the microbiome.

Institute of Technology.

addition, through the acquisition of the privately held Israel-based company, RondinX Ltd.

in 2017, we gained access to high throughput

genomic analyses techniques developed by Professor Eran Segal, a leading computational biologist from the Department of Computer Science

and Applied Mathematics at the WIS.

The combination of the technologies and expertise from these leaders in each of their respective fields

is critical in enabling us to focus on treating complex human diseases and conditions by precise manipulation of the microbiome.

Manufacturing

have developed a manufacturing process that utilizes state of the art industrial methods for the manufacturing of our product candidates.

This process is designed to comply with current Good Manufacturing Practice, or cGMP, with the appropriate scale to meet our clinical

study needs, and to fulfill the requirements of regulators for human studies.

We currently operate a manufacturing model that combines

an in-house process development and manufacturing suite with the flexibility to outsource to third-party manufacturing organizations

As such, for BX004 we have engaged an additional third-party provider to supplement our in-house process development activities.

We have selected this organization based on its experience, capability, capacity and regulatory status.

Projects are managed by a specialist

team of our internal staff, who assure compliance with the technical aspects and regulatory requirements of the manufacturing process.

maintain service agreements with multiple manufacturers.

These service agreements generally are short-term in nature and can be extended

The production amounts identified in our current service agreements are sufficient to support our current clinical study

March 2021, we moved into a new 6,500 square foot manufacturing facility in our headquarters, in Ness Ziona, Israel.

Our facility is

designed with the capacity to produce clinical quantities of our product candidates required for future early-stage clinical development.

Our facility consists of two suites for drug substance phage production/development as well as formulation and final drug product production

rooms to support topical, oral, inhaled and injectable phage-based products in a liquid, cream, semi-solid or dry form.

we do not have a current need for a commercial scale manufacturing capacity, at the appropriate time we intend to evaluate building large

scale cGMP internal manufacturing capabilities, which may include expansion of our operations.

strive to protect the proprietary technology that we believe is important to our business, including seeking and maintaining patent protection

in the United States and internationally for our product candidates and discovery platform.

We also rely on trademarks, trade secrets,

know-how, copyrights, continuing technological innovation and in-licensing opportunities to develop and maintain our proprietary position.

For more information regarding the risks related to our intellectual property, see “ Risk Factors — Risks Related to our

Licensed and Co-Owned Intellectual Property.

plan to continue to expand our intellectual property estate by filing patent applications directed to formulations, related methods of

treatment, methods of manufacture or identification from our ongoing development of our product candidates, as well as discovery based

on our proprietary product platform.

Our success will depend on our ability to obtain and maintain patent and other proprietary protection

for commercially important technology, inventions and know-how related to our business, defend, and enforce any patents that we may obtain,

preserve the confidentiality of our trade secrets and know-how and operate without infringing the valid and enforceable patents and proprietary

rights of third parties.

patent applications in the United States and certain other jurisdictions are maintained in secrecy for 18 months or potentially even

longer, and because publication of discoveries in the scientific or patent literature often lags behind actual discoveries and patent

application filings, we cannot be certain of the priority of inventions covered by pending patent applications.

Accordingly, we may not

have been the first to invent the subject matter disclosed in some of its patent applications or the first to file patent applications

covering such subject matter, and we may have to participate in interference proceedings or derivation proceedings declared by the United

States Patent and Trademark Office, or USPTO, to determine priority of invention.

patent portfolio consists of owned patent applications, as well as both licensed and co-owned patent applications (that are also licensed).

See “ Risk Factors — Risks Related to our Licensed and Co-Owned Intellectual Property.

” For some of these applications,

prosecution has not started, and others are in the early stages of prosecution in the United States and in selected jurisdictions outside

of the United States.

We solely own four patent families.

We co-own one international patent family (United States, Europe, Australia,

Canada, China and Japan with Keio University in Tokyo, Japan, or Keio, one international patent family (United States, Australia, Brazil,

Canada, China, Japan, Israel, European Patent Office, Korea and India national filings) with Yeda Research and Development Company Limited,

or Yeda, and one international patent family (United States, Europe, Australia, Canada, China and Japan) with both Keio and Yeda.

have an exclusive license from Yeda and Keio for these co-owned patent applications.

We have exclusive licenses from Yeda, Keio, or MIT

for the rest of the patents and patent applications in its portfolio.

significant portion of our portfolio is directed to our product candidates, specifically:

CF, AD, IBD, PSC and CRC, as well as

to our bacterial target discovery and bacteriophage discovery technology platforms.

Prosecution has yet to commence for most of the pending

patent applications covering our product candidates.

Prosecution is a lengthy process, during which the scope of the claims initially

submitted for examination by the USPTO are often significantly narrowed by the time they issue, if they issue at all.

We expect this

to be the case with respect to our licensed and co-owned patent applications, described briefly below.

solely own one patent family (PCT stage) containing claims directed to pharmaceutical compositions comprising combinations of bacteriophage

to treat chronic Pseudomonas lung infections, especially common in CF patients, methods of use for these bacteriophage combinations,

and methods of identifying patients who will respond to these bacteriophage combinations.

Any United States patents issuing from the

pending application covering our lead bacteriophage combination in this program, if issued, are expected to expire in 2042.

adjustments or patent term extensions could result in later expiration dates.

solely own one patent family (pre-PCT stage) containing claims directed to pharmaceutical compositions comprising combinations of bacteriophage

to treat skin infections, especially common in AD patients, methods of use for these bacteriophage combinations, and methods of identifying

patients who will respond to these bacteriophage combinations.

Any United States patents issuing from the pending application covering

our lead bacteriophage combination in this program, if issued, are expected to expire in 2042.

Patent term adjustments or patent term

extensions could result in later expiration dates.

solely own one patent family (PCT stage), co-own with Keio one international patent family (United States, Europe, Australia, Canada,

China and Japan) and co-own with Keio and Yeda one international patent family (United States, Europe, Australia, Canada, China and Japan),

containing claims directed to pharmaceutical compositions comprising combinations of bacteriophage useful to treat IBD and other diseases

of the gastrointestinal tract, methods of use for these bacteriophage combinations, methods of identifying patients who will respond

to these bacteriophage combinations, and methods of treating IBD by targeting bacterial strains discovered to cause or contribute to

that disease.

also have an exclusive license from Keio for an international patent family including patent applications in the United States, Australia,

Canada, China, Europe and Japan.

These applications are directed to methods of use for these bacteriophage combinations, methods of identifying

patients who will respond to these bacteriophage combinations, and methods of treating IBD by targeting a bacterial strain discovered

to cause or contribute to that disease.

Any United States patents issuing from the pending applications covering our lead bacteriophage

combination in this program, if issued, are expected to expire in 2037, 2038 or 2042.

Patent term adjustments or patent term extensions

could result in later expiration dates.

have an exclusive license to one United States national patent application and two Japanese patent applications with claims directed

to pharmaceutical compositions comprising bacterial strains discovered to be beneficial in the treatment of PSC and methods of using

the same, and to methods of treating PSC by reducing the level of certain bacterial strains discovered to contribute to PSC.

States patents issuing from the pending applications in this program, if issued, are expected to expire in 2038 or 2039.

adjustments or patent term extensions could result in later expiration dates.

solely own one patent family (PCT stage), containing claims directed to pharmaceutical compositions and formulations comprising combinations

of bacteriophage (both synthetic and naturally occurring) useful to treat cancer.

patent issuing from the pending application

covering our lead bacteriophage combination in this program, if issued, are expected to expire in 2041.

Patent term adjustments or patent

term extensions could result in later expiration dates.

co-own with Yeda one international patent family (United States, Australia, Brazil, Canada, China, Japan, Israel, European Patent Office,

Korea and India national filings), containing claims directed to pharmaceutical compositions and formulations comprising combinations

of bacteriophage useful to treat acne, methods of use for these bacteriophage combinations, and methods of identifying patients who will

respond to these bacteriophage combinations.

Any United States patents issuing from the pending application covering our lead bacteriophage

combination in this program, if issued, are expected to expire in 2038.

Patent term adjustments or patent term extensions could result

in later expiration dates.

are exclusively licensed to two United States issued patents, two European Patent Convention applications, and three United States national

applications.

These licensed patent families include two issued United States patents and multiple pending patent applications, with

claims directed to methods of producing recombinant bacteriophage in yeast cells, recombinant bacteriophage with broader or altered host

range than the parent strains from which they are derived, and recombinant methods for increasing the lytic efficiency of a bacteriophage.

The patents issuing from the pending applications in the United States directed to our platform, if issued, are expected to expire between

2034 and 2038.

We have developed a manufacturing process that

utilizes state of the art industrial methods for the manufacturing of our product candidates.

This process is designed to comply with

current Good Manufacturing Practice, or cGMP, with the appropriate scale to meet our clinical study needs, and to fulfill the requirements

of regulators for human studies.

We currently operate a manufacturing model that combines an in-house process development and manufacturing

suite with the flexibility to outsource to third-party manufacturing organizations when needed.

As such, for BX004 we have engaged an

additional third-party provider to supplement our in-house process development activities.

We have selected this organization based on

its experience, capability, capacity and regulatory status.

Projects are managed by a specialist team of our internal staff, who assure

compliance with the technical aspects and regulatory requirements of the manufacturing process.

We maintain service agreements with multiple manufacturers.

These service agreements generally are short-term in nature and can be extended or renewed.

The production amounts identified in our current

service agreements are sufficient to support our current clinical study needs.

In March 2021, we moved into a new 6,500 square

foot manufacturing facility in our headquarters, in Ness Ziona, Israel.

Our facility is designed with the capacity to produce clinical

quantities of our product candidates required for future early-stage clinical development.

Our facility consists of two suites for drug

substance phage production/development as well as formulation and final drug product production rooms to support topical, oral, inhaled

and injectable phage-based products in a liquid, cream, semi-solid or dry form.

While we do not have a current need for a commercial

scale manufacturing capacity, at the appropriate time we intend to evaluate building large scale cGMP internal manufacturing capabilities,

which may include expansion of our operations.

Intellectual Property

We strive to protect the proprietary technology

that we believe is important to our business, including seeking and maintaining patent protection in the United States and internationally

for our product candidates and discovery platform.

We also rely on trademarks, trade secrets, know-how, copyrights, continuing technological

innovation and in-licensing opportunities to develop and maintain our proprietary position.

For more information regarding the risks related

to our intellectual property, see “ Risk Factors — Risks Related to our Licensed and Co-Owned Intellectual Property.

We plan to continue to expand our intellectual

property estate by filing patent applications directed to formulations, related methods of treatment, methods of manufacture or identification

from our ongoing development of our product candidates, as well as discovery based on our proprietary product platform.

Our success will

depend on our ability to obtain and maintain patent and other proprietary protection for commercially important technology, inventions

and know-how related to our business, defend, and enforce any patents that we may obtain, preserve the confidentiality of our trade secrets

and know-how and operate without infringing the valid and enforceable patents and proprietary rights of third parties.

Because patent applications in the United States

and certain other jurisdictions are maintained in secrecy for 18 months or potentially even longer, and because publication of discoveries

in the scientific or patent literature often lags behind actual discoveries and patent application filings, we cannot be certain of the

priority of inventions covered by pending patent applications.

Accordingly, we may not have been the first to invent the subject matter

disclosed in some of its patent applications or the first to file patent applications covering such subject matter, and we may have to

participate in interference proceedings or derivation proceedings declared by the United States Patent and Trademark Office, or USPTO,

to determine priority of invention.

Patent portfolio

Our patent portfolio consists of owned patent applications,

as well as both licensed and co-owned patent applications (that are also licensed).

See “ Risk Factors — Risks Related to

our Licensed and Co-Owned Intellectual Property.

” For some of these applications, prosecution has not started, and others are

in the early stages of prosecution in the United States and in selected jurisdictions outside of the United States.

We solely own four

patent families.

We co-own one US patent family with Keio University in Tokyo, Japan, or Keio, one international patent family (United

States, Australia, Brazil, Canada, European Patent Office national filings) with Yeda Research and Development Company Limited, or Yeda,

and one international patent family (United States, Europe) with both Keio and Yeda.

We have an exclusive license from Yeda and Keio for

these co-owned patent applications.

We have exclusive licenses from Yeda or Keio for the rest of the patents and patent applications in

its portfolio.

A significant portion of our portfolio is directed

to our product candidates, specifically:

CF, AD, IBD, PSC and CRC, as well as to our bacterial target discovery and bacteriophage discovery

technology platforms.

Prosecution has yet to commence for most of the pending patent applications covering our product candidates.

is a lengthy process, during which the scope of the claims initially submitted for examination by the USPTO are often significantly narrowed

by the time they issue, if they issue at all.

We expect this to be the case with respect to our licensed and co-owned patent applications,

described briefly below.

We solely own one patent family (PCT stage) containing

claims directed to pharmaceutical compositions comprising combinations of bacteriophage to treat chronic Pseudomonas lung infections,

especially common in CF patients, methods of use for these bacteriophage combinations, and methods of identifying patients who will respond

to these bacteriophage combinations.

Any United States patents issuing from the pending application covering our lead bacteriophage combination

in this program, if issued, are expected to expire in 2042.

Patent term adjustments or patent term extensions could result in later expiration

We solely own one patent family (PCT stage) containing

claims directed to pharmaceutical compositions comprising combinations of bacteriophage to treat skin infections, especially common in

AD patients, methods of use for these bacteriophage combinations, and methods of identifying patients who will respond to these bacteriophage

combinations.

Any United States patents issuing from the pending application covering our lead bacteriophage combination in this program,

if issued, are expected to expire in 2042.

Patent term adjustments or patent term extensions could result in later expiration dates.

term of individual patents depends upon the legal term of the patents in the countries in which they are obtained.

In most countries

in which we file patent applications, including the United States, the base term is 20 years from the filing date of the earliest-filed

non-provisional patent application from which the patent claims priority.

The term of a United States patent can be lengthened by patent

term adjustment, which compensates the owner of the patent for administrative delays at the USPTO.

In some cases, the term of a United

States patent is shortened by a terminal disclaimer that reduces its term to that of an earlier-expiring patent.

The term of a United

States patent may be eligible for patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred

to as the Hatch-Waxman Act, to account for at least some of the time the drug is under development and regulatory review after the patent

With regard to a drug for which FDA approval is the first permitted marketing of the active ingredient, the Hatch-Waxman

Act allows for extension of the term of one United States patent that includes at least one claim covering the composition of matter

of such an FDA-approved drug, an FDA-approved method of treatment using the drug and/or a method of manufacturing the FDA-approved drug.

The extended patent term cannot exceed the shorter of five years beyond the non-extended expiration of the patent or fourteen years from

the date of the FDA approval of the drug, and a patent cannot be extended more than once or for more than a single product.

period of extension, if granted, the scope of exclusivity is limited to the approved product for approved uses.

Some foreign jurisdictions,

including Europe and Japan, have analogous patent term extension provisions, which allow for extension of the term of a patent that covers

a drug approved by the applicable foreign regulatory agency.

the future, if and when our product candidates receive FDA approval, we expect to apply, if appropriate, for patent term extension on

patents directed to those product candidates, their methods of use and/or methods of manufacture.

However, there is no guarantee that

the applicable authorities, including the FDA in the United States, will agree with our assessment of whether such extensions should

be granted, and if granted, the length of such extensions.

Secrets and Know-How

addition to patents, we rely on trade secrets and know-how to develop and maintain our competitive position.

We typically rely on trade

secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.

protect trade secrets and know-how by establishing confidentiality agreements and invention assignment agreements with our employees,

consultants, scientific advisors, contractors and collaborators.

These agreements provide that all confidential information developed

or made known during the course of an individual’s or entities’ relationship with us must be kept confidential during and

after the relationship.

These agreements also provide that all inventions resulting from work performed for us or relating to our business

and conceived or completed during the period of employment or assignment, as applicable, shall be our exclusive property.

we take other appropriate precautions, such as physical and technological security measures, to guard against misappropriation of its

proprietary information by third parties.

we take steps to protect our proprietary information and trade secrets, including through contractual means with our employees and consultants,

third parties may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our

trade secrets or disclose our technology.

Thus, we may not be able to meaningfully protect our trade secrets and benefit from the exclusive

For more information regarding the risks related to our intellectual property, see “ Risk Factors — Risks

Related to Our Licensed and Co-Owned Intellectual Property .”

biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, strong competition and an emphasis on

proprietary products.

While we believe that our technology, knowledge and experience provide us with competitive advantages, we face

substantial competition from many different sources, including larger pharmaceutical companies with more resources.

Specialty biotechnology

companies, academic research institutions, governmental agencies, as well as public and private institutions are also potential sources

of competitive products and technologies.

We believe that the key competitive factors affecting the success of any of our product candidates

will include efficacy, safety profile, time to market, cost, level of promotional activity and intellectual property protection.

are aware of a number of biotechnology companies developing bacteriophage products to treat diseases.

To our knowledge, several biotechnology

companies, such as Adaptive Phage Therapeutics, Locus Biosciences, Inc., Armata Pharmaceuticals, Inc.

and SNIPR Biome, as well as academic

institutions, have discovery stage or clinical programs utilizing naturally occurring phage or synthetic biology approaches.

we are aware of several investigational and marketed products to treat the indications that we are targeting with our product candidates,

including, but not limited to:

Trikafta, Symdeco, Pulmozyme, Tobramycin, Aztreonam

Elidel, Eucrisa, Ruxolitinib, Dupixent

Humira, Stelara, Entyvio, Inflectra and

Obeticholic acid (Intercept clinical candidate),

GS-9674 (Gilead clinical candidate), BTT1023, (Acorda Therapeutics candidate) and PLN-74809 (Pliant clinical candidate)

of our competitors, either alone or with their strategic partners, have substantially greater financial, technical and human resources

than ours and significantly greater experience in the discovery and development of product candidates, obtaining FDA and other regulatory

approvals of products and the commercialization of those products.

Accordingly, our competitors may be more successful than us in discovering

product candidates, obtaining approval for such product candidates and achieving widespread market acceptance.

Our competitors’

products may be more effective, or more effectively marketed and sold, than any product we may commercialize and may render our product

candidates obsolete or non-competitive before we can recover the expenses of developing and commercializing any of our product candidates.

We anticipate that we will face intense and increasing competition as new drugs enter the market and advanced technologies become available.

third parties compete with us in recruiting and retaining qualified scientific, clinical, manufacturing, sales and marketing and management

personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary

to, or necessary for, our program.

and Marketing

intend to pursue the commercialization of our drug product candidates either by building internal sales and marketing capabilities or

through collaborations with others.

We solely own one patent family (PCT stage), co-own

with Keio one US patent family and co-own with Keio and Yeda one international patent family (United States, Europe), containing claims

directed to pharmaceutical compositions comprising combinations of bacteriophage useful to treat IBD and other diseases of the gastrointestinal

tract, methods of use for these bacteriophage combinations, methods of identifying patients who will respond to these bacteriophage combinations,

and methods of treating IBD by targeting bacterial strains discovered to cause or contribute to that disease.

We also have an exclusive license from Keio for

an international patent family including patent applications in the United States, Australia, Canada, China, Europe and Japan.

These applications

are directed to methods of use for these bacteriophage combinations, methods of identifying patients who will respond to these bacteriophage

combinations, and methods of treating IBD by targeting a bacterial strain discovered to cause or contribute to that disease.

States patents issuing from the pending applications covering our lead bacteriophage combination in this program, if issued, are expected

to expire in 2037, 2038 or 2042.

Patent term adjustments or patent term extensions could result in later expiration dates.

We have an exclusive license to one United States

national patent application and two Japanese patent applications with claims directed to pharmaceutical compositions comprising bacterial

strains discovered to be beneficial in the treatment of PSC and methods of using the same, and to methods of treating PSC by reducing

the level of certain bacterial strains discovered to contribute to PSC.

Any United States patents issuing from the pending applications

in this program, if issued, are expected to expire in 2038 or 2039.

Patent term adjustments or patent term extensions could result in

later expiration dates.

We solely own one patent family (PCT stage), containing

claims directed to pharmaceutical compositions and formulations comprising combinations of bacteriophage (both synthetic and naturally

occurring) useful to treat cancer.

patent issuing from the pending application covering our lead bacteriophage combination in

this program, if issued, are expected to expire in 2041.

Patent term adjustments or patent term extensions could result in later expiration

The term of individual patents depends upon the

legal term of the patents in the countries in which they are obtained.

In most countries in which we file patent applications, including

the United States, the base term is 20 years from the filing date of the earliest-filed non-provisional patent application from which

the patent claims priority.

The term of a United States patent can be lengthened by patent term adjustment, which compensates the owner

of the patent for administrative delays at the USPTO.

In some cases, the term of a United States patent is shortened by a terminal disclaimer

that reduces its term to that of an earlier-expiring patent.

The term of a United States patent may be eligible for patent term extension

under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Act, to account for at least

some of the time the drug is under development and regulatory review after the patent is granted.

With regard to a drug for which FDA

approval is the first permitted marketing of the active ingredient, the Hatch-Waxman Act allows for extension of the term of one United

States patent that includes at least one claim covering the composition of matter of such an FDA-approved drug, an FDA-approved method

of treatment using the drug and/or a method of manufacturing the FDA-approved drug.

The extended patent term cannot exceed the shorter

of five years beyond the non-extended expiration of the patent or fourteen years from the date of the FDA approval of the drug, and a

patent cannot be extended more than once or for more than a single product.

During the period of extension, if granted, the scope of exclusivity

is limited to the approved product for approved uses.

Some foreign jurisdictions, including Europe and Japan, have analogous patent term

extension provisions, which allow for extension of the term of a patent that covers a drug approved by the applicable foreign regulatory

In the future, if and when our product candidates

receive FDA approval, we expect to apply, if appropriate, for patent term extension on patents directed to those product candidates, their

methods of use and/or methods of manufacture.

However, there is no guarantee that the applicable authorities, including the FDA in the

United States, will agree with our assessment of whether such extensions should be granted, and if granted, the length of such extensions.

Trade Secrets and Know-How

In addition to patents, we rely on trade secrets

and know-how to develop and maintain our competitive position.

We typically rely on trade secrets to protect aspects of our business that

are not amenable to, or that we do not consider appropriate for, patent protection.

We protect trade secrets and know-how by establishing

confidentiality agreements and invention assignment agreements with our employees, consultants, scientific advisors, contractors and collaborators.

These agreements provide that all confidential information developed or made known during the course of an individual’s or entities’

relationship with us must be kept confidential during and after the relationship.

These agreements also provide that all inventions resulting

from work performed for us or relating to our business and conceived or completed during the period of employment or assignment, as applicable,

shall be our exclusive property.

In addition, we take other appropriate precautions, such as physical and technological security measures,

to guard against misappropriation of its proprietary information by third parties.

Although we take steps to protect our proprietary

information and trade secrets, including through contractual means with our employees and consultants, third parties may independently

develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets or disclose our

Thus, we may not be able to meaningfully protect our trade secrets and benefit from the exclusive use thereof.

For more information

regarding the risks related to our intellectual property, see “ Risk Factors — Risks Related to Our Licensed and Co-Owned

Intellectual Property .”

The biotechnology and pharmaceutical industries

are characterized by rapidly advancing technologies, strong competition and an emphasis on proprietary products.

While we believe that

our technology, knowledge and experience provide us with competitive advantages, we face substantial competition from many different sources,

including larger pharmaceutical companies with more resources.

Specialty biotechnology companies, academic research institutions, governmental

agencies, as well as public and private institutions are also potential sources of competitive products and technologies.

We believe that

the key competitive factors affecting the success of any of our product candidates will include efficacy, safety profile, time to market,

cost, level of promotional activity and intellectual property protection.

We are aware of a number of biotechnology companies

developing bacteriophage products to treat diseases.

To our knowledge, several biotechnology companies, such as Adaptive Phage Therapeutics,

Locus Biosciences, Inc., Armata Pharmaceuticals, Inc.

and SNIPR Biome, as well as academic institutions, have discovery stage or clinical

programs utilizing naturally occurring phage or synthetic biology approaches.

In addition, we are aware of several investigational and

marketed products to treat the indications that we are targeting with our product candidates, including, but not limited to:

Trikafta, Symdeco,

Pulmozyme, Tobramycin, Aztreonam

Elidel, Eucrisa,

Ruxolitinib, Dupixent

Many of our competitors, either alone or with their

strategic partners, have substantially greater financial, technical and human resources than ours and significantly greater experience

in the discovery and development of product candidates, obtaining FDA and other regulatory approvals of products and the commercialization

of those products.

Accordingly, our competitors may be more successful than us in discovering product candidates, obtaining approval for

such product candidates and achieving widespread market acceptance.

Our competitors’ products may be more effective, or more effectively

marketed and sold, than any product we may commercialize and may render our product candidates obsolete or non-competitive before we can

recover the expenses of developing and commercializing any of our product candidates.

We anticipate that we will face intense and increasing

competition as new drugs enter the market and advanced technologies become available.

These third parties compete with us in recruiting

and retaining qualified scientific, clinical, manufacturing, sales and marketing and management personnel, establishing clinical trial

sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our program.

Sales and Marketing

to pursue the commercialization of our drug product candidates either by building internal sales and marketing capabilities or through

collaborations with others.

2021, we entered into a stock purchase agreement with a subsidiary of Maruho, a leading dermatology-focused pharmaceutical company in

2 unchanged sentences

The right of first offer will commence following the

availability of results from the Phase 1/2 study expected in the fourth quarter of 2022.

authorities in the United States and other countries regulate, among other things, the research, development, testing, manufacture, quality

control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting,

marketing and export and import of drug and biological products.

Generally, before a new drug or biologic can be marketed, considerable

data demonstrating its quality, safety, efficacy, purity, and/or potency must be obtained, organized into a format specific for each

regulatory authority, submitted for review and approved by the regulatory authority where the product is intended to be marketed.

availability of results from the Phase 1/2 study.

Government Regulation

Government authorities in the United States and

other countries regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging,

storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import

of drug and biological products.

Generally, before a new drug or biologic can be marketed, considerable data demonstrating its quality,

safety, efficacy, purity, and/or potency must be obtained, organized into a format specific for each regulatory authority, submitted for

review and approved by the regulatory authority where the product is intended to be marketed.

Biological Product Development Process

the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act, or the FDCA, and its implementing regulations

under the FDCA, the Public Health Service Act, or the PHSA, and their implementing regulations.

Both drugs and biologics are also subject

to other federal, state and local statutes and regulations.

The process of obtaining regulatory approvals and the subsequent compliance

with appropriate federal, state and local statutes and regulations requires the expenditure of substantial time and financial resources.

In the United States, the FDA regulates drugs under

the Federal Food, Drug, and Cosmetic Act, or the FDCA, and its implementing regulations under the FDCA, the Public Health Service Act,

or the PHSA, and their implementing regulations.

Both drugs and biologics are also subject to other federal, state and local statutes

and regulations.

The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state and local

statutes and regulations requires the expenditure of substantial time and financial resources.

Failure to comply with applicable U.S.

requirements at any time during the product development, approval, or post-marketing process may

subject an applicant to administrative or judicial sanctions.

These sanctions could include, among other actions, the FDA’s refusal

to approve pending applications, withdrawal of an approval or license revocation, a clinical hold, untitled or warning letters, product

recalls or market withdrawals, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals

of government contracts, restitution, disgorgement and civil or criminal penalties.

Any agency or judicial enforcement action could have

a material adverse effect on us.

of our current product candidates and future product candidates must be approved by the FDA through a Biologics License Application,

or BLA, process before they may be legally marketed in the United States.

requirements at any time during the product development, approval, or post-marketing process may subject an applicant to administrative

or judicial sanctions.

These sanctions could include, among other actions, the FDA’s refusal to approve pending applications, withdrawal

of an approval or license revocation, a clinical hold, untitled or warning letters, product recalls or market withdrawals, product seizures,

total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement

and civil or criminal penalties.

Any agency or judicial enforcement action could have a material adverse effect on us.

Certain of our current product candidates and future

product candidates must be approved by the FDA through a Biologics License Application, or BLA, process before they may be legally marketed

in the United States.

The process generally involves the following:

Completion of extensive preclinical studies in accordance

with applicable regulations, including studies conducted in accordance with GLP requirements, if needed;

Submission to the FDA of an IND, which

must become effective before human clinical trials may begin;

Approval by an institutional review board, or IRB,

at each clinical trial site before each trial may be initiated;

● Completion of extensive preclinical

studies in accordance with applicable regulations, including studies conducted in accordance with GLP requirements, if needed;

● Submission to the FDA of an

IND, which must become effective before human clinical trials may begin;

● Approval by an institutional

review board, or IRB, at each clinical trial site before each trial may be initiated;

● Performance of adequate and

well-controlled human clinical trials in accordance with applicable IND regulations, good clinical practice, or GCP, requirements

and other clinical trial-related regulations to establish the safety, purity, potency and efficacy of the investigational product

for each proposed indication;

well-controlled human clinical trials in accordance with applicable IND regulations, good clinical practice, or GCP, requirements and

other clinical trial-related regulations to establish the safety, purity, potency and efficacy of the investigational product for each

proposed indication;

● Submission to the FDA of a BLA;

A determination by the FDA within 60 days of its receipt

of a BLA to accept the application for review;

Satisfactory completion of an FDA pre-approval inspection

of the manufacturing facility or facilities where the biologic will be produced to assess compliance with cGMP requirements to assure

that the facilities, methods and controls are adequate to preserve the biologic’s identity, strength, quality and purity;

Potential FDA audit of the clinical trial sites that

generated the data in support of the BLA;

Payment of user fees for FDA review of the BLA (unless

a fee waiver applies);

FDA review and approval of the BLA, including consideration

of the views of any FDA advisory committee, prior to any commercial marketing or sale of the biologic in the United States.

Studies and IND

● A determination by the FDA within

60 days of its receipt of a BLA to accept the application for review;

● Satisfactory completion of an

FDA pre-approval inspection of the manufacturing facility or facilities where the biologic will be produced to assess compliance with

cGMP requirements to assure that the facilities, methods and controls are adequate to preserve the biologic’s identity, strength,

quality and purity;

● Potential FDA audit of the clinical

trial sites that generated the data in support of the BLA;

● Payment of user fees for FDA

review of the BLA (unless a fee waiver applies);

● FDA review and approval of the

BLA, including consideration of the views of any FDA advisory committee, prior to any commercial marketing or sale of the biologic in

the United States.

Preclinical Studies and IND

Preclinical studies include laboratory evaluation

16 unchanged sentences

in the FDA allowing clinical trials to commence.

trials involve the administration of the biological product candidate to healthy volunteers or disease-affected patients under the supervision

of qualified investigators, generally physicians not employed by, or under, the trial sponsor’s control.

Clinical trials are conducted

under protocols detailing, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion

criteria, and the parameters to be used to monitor subject safety and efficacy, including stopping rules that assure a clinical trial

will be stopped if certain adverse events should occur.

Each protocol and any amendments to the protocol must be submitted to the FDA

as part of the IND.

Clinical trials must be conducted and monitored in accordance with the FDA’s regulations comprising the GCP

requirements, including the requirement that all research subjects provide informed consent.

Further, each clinical trial must be reviewed

and approved by an IRB at or servicing each institution at which the clinical trial will be conducted.

An IRB is charged with protecting

the welfare and rights of study participants and considers such items as whether the risks to individuals participating in the clinical

trials are minimized and are reasonable in relation to anticipated benefits.

The IRB also approves the form and content of the informed

consent that must be signed by each clinical trial subject or his or her legal representative and must monitor the clinical trial until

There are also requirements governing the reporting of ongoing clinical trials and completed clinical trial results to public

Information about certain clinical trials, including clinical trial results, must be submitted within specific timeframes

for publication on the www.clinicaltrials.gov website.

trials generally are conducted in three sequential phases, known as Phase 1, Phase 2 and Phase 3, and may overlap.

Phase 1 clinical trials generally involve a small number

of healthy volunteers or disease-affected patients who are initially exposed to a single dose and then multiple doses of the product

The primary purpose of these clinical trials is to assess the metabolism, pharmacologic action, side effect tolerability

and safety of the product candidate.

Phase 2 clinical trials generally involve studies in

disease-affected patients to evaluate proof of concept and/or determine the dosing regimen(s) for subsequent investigations.

same time, safety and sometimes further pharmacokinetic and pharmacodynamic information is collected, possible adverse effects and

safety risks are identified and a preliminary evaluation of efficacy is conducted.

Phase 3 clinical trials generally involve a large number

of patients at multiple sites and are designed to provide the data necessary to demonstrate the effectiveness of the product for

its intended use, its safety in use and to establish the overall benefit/risk relationship of the product and provide an adequate

basis for labeling for new drugs.

Post-approval

trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval.

These trials are conducted

to gain additional experience from the treatment of patients in the intended therapeutic indication.

In certain instances, the FDA may

mandate the performance of Phase 4 clinical trials as a condition of approval of a BLA.

reports detailing the results of the clinical trials, among other information, must be submitted at least annually to the FDA and written

IND safety reports must be submitted to the FDA and the investigators for serious and unexpected suspected adverse events, findings from

other studies or animal or in vitro testing that suggest a significant risk for human subjects and any clinically important increase

in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure.

is possible for Phase 1, Phase 2, Phase 3 and other types of clinical trials not to be completed successfully within a specified period,

The FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that

the patients are being exposed to an unacceptable health risk.

Similarly, an IRB can suspend or terminate approval of a clinical trial

at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the biologic has

been associated with unexpected serious harm to patients.

Additionally, some clinical trials are overseen by an independent group of

qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee.

This group provides

authorization for whether a trial may move forward at designated check points based on access to certain data from the trial.

with clinical trials, companies may complete additional animal studies and also must develop additional information about the chemistry

and physical characteristics of the biologic as well as finalize a process for manufacturing the product in commercial quantities in

accordance with cGMP requirements.

The manufacturing process must be capable of consistently producing quality batches of the product

and, among other things, companies must develop methods for testing the identity, strength, quality and purity of the final product.

Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product

candidates do not undergo unacceptable deterioration over their shelf life.

Clinical Trials

Clinical trials involve the administration of the

biological product candidate to healthy volunteers or disease-affected patients under the supervision of qualified investigators, generally

physicians not employed by, or under, the trial sponsor’s control.

Clinical trials are conducted under protocols detailing, among

other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, and the parameters to

be used to monitor subject safety and efficacy, including stopping rules that assure a clinical trial will be stopped if certain adverse

events should occur.

Each protocol and any amendments to the protocol must be submitted to the FDA as part of the IND.

Clinical trials

must be conducted and monitored in accordance with the FDA’s regulations comprising the GCP requirements, including the requirement

that all research subjects provide informed consent.

Further, each clinical trial must be reviewed and approved by an IRB at or servicing

each institution at which the clinical trial will be conducted.

An IRB is charged with protecting the welfare and rights of study participants

and considers such items as whether the risks to individuals participating in the clinical trials are minimized and are reasonable in

relation to anticipated benefits.

The IRB also approves the form and content of the informed consent that must be signed by each clinical

trial subject or his or her legal representative and must monitor the clinical trial until completed.

There are also requirements governing

the reporting of ongoing clinical trials and completed clinical trial results to public registries.

Information about certain clinical

trials, including clinical trial results, must be submitted within specific timeframes for publication on the www.clinicaltrials.gov website.

Clinical trials generally are conducted in three

sequential phases, known as Phase 1, Phase 2 and Phase 3, and may overlap.

● Phase 1 clinical trials generally

involve a small number of healthy volunteers or disease-affected patients who are initially exposed to a single dose and then multiple

doses of the product candidate.

The primary purpose of these clinical trials is to assess the metabolism, pharmacologic action, side

effect tolerability and safety of the product candidate.

● Phase 2 clinical trials generally

involve studies in disease-affected patients to evaluate proof of concept and/or determine the dosing regimen(s) for subsequent investigations.

At the same time, safety and sometimes further pharmacokinetic and pharmacodynamic information is collected, possible adverse effects

and safety risks are identified and a preliminary evaluation of efficacy is conducted.

● Phase 3 clinical trials generally

involve a large number of patients at multiple sites and are designed to provide the data necessary to demonstrate the effectiveness

of the product for its intended use, its safety in use and to establish the overall benefit/risk relationship of the product and provide

an adequate basis for labeling for new drugs.

Post-approval trials, sometimes referred to as

Phase 4 clinical trials, may be conducted after initial marketing approval.

These trials are conducted to gain additional experience from

the treatment of patients in the intended therapeutic indication.

In certain instances, the FDA may mandate the performance of Phase 4

clinical trials as a condition of approval of a BLA.

Progress reports detailing the results of the clinical

trials, among other information, must be submitted at least annually to the FDA and written IND safety reports must be submitted to the

FDA and the investigators for serious and unexpected suspected adverse events, findings from other studies or animal or in vitro testing

that suggest a significant risk for human subjects and any clinically important increase in the rate of a serious suspected adverse reaction

over that listed in the protocol or investigator brochure.

It is possible for Phase 1, Phase 2, Phase 3 and

other types of clinical trials not to be completed successfully within a specified period, if at all.

The FDA or the sponsor may suspend

or terminate a clinical trial at any time on various grounds, including a finding that the patients are being exposed to an unacceptable

Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being

conducted in accordance with the IRB’s requirements or if the biologic has been associated with unexpected serious harm to patients.

Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor,

known as a data safety monitoring board or committee.

This group provides authorization for whether a trial may move forward at designated

check points based on access to certain data from the trial.

Concurrent with clinical trials, companies may

complete additional animal studies and also must develop additional information about the chemistry and physical characteristics of the

biologic as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.

manufacturing process must be capable of consistently producing quality batches of the product and, among other things, companies must

develop methods for testing the identity, strength, quality and purity of the final product.

Additionally, appropriate packaging must

be selected and tested, and stability studies must be conducted to demonstrate that the product candidates do not undergo unacceptable

deterioration over their shelf life.

FDA Review Process

Following completion of the clinical trials, data

are analyzed to assess whether the investigational product is safe and effective for the proposed indicated use or uses, and also meets

the regulatory requirements for potency and purity.

The results of preclinical studies and clinical trials are then submitted to the FDA

as part of a BLA, along with proposed labeling, chemistry and manufacturing information to ensure product quality and other relevant data.

The BLA is a request for approval to market the biologic for one or more specified indications and must contain proof of safety, purity

The application may include both negative and ambiguous results of preclinical studies and clinical trials, as well as positive

Data may come from company-sponsored clinical trials intended to test the safety and efficacy of a product’s use or from

a number of alternative sources, including studies initiated by investigators.

To support marketing approval, the data submitted must

be sufficient in quality and quantity to establish the safety and efficacy in the intended indication, purity and potency of the investigational

product to the satisfaction of the FDA.

FDA approval of a BLA must be obtained before a biologic may be marketed in the United States.

Under the Prescription Drug User Fee Act, or PDUFA, as amended, each BLA must be accompanied by a user fee.

The FDA adjusts the PDUFA

user fees on an annual basis.

Fee waivers or reductions are available in certain circumstances, including a waiver of the application

fee for the first application filed by a small business.

Additionally, no user fees are assessed on BLAs for products designated as orphan

drugs, unless the product also includes a non-orphan indication.

The FDA reviews all submitted BLAs before it accepts

them for filing and may request additional information rather than accept the BLA for filing.

The FDA must make a decision on accepting

a BLA for filing within 60 days of receipt, and such a decision could include a refusal to file by the FDA.

Once the submission is accepted

for filing, the FDA begins an in-depth review of the BLA.

Under the goals and policies agreed to by the FDA under PDUFA, the FDA has 10

months, from the filing date, in which to complete its initial review of an original BLA and respond to the applicant, and six months

from the filing date of an original BLA designated for priority review.

The FDA does not always meet its PDUFA goal dates for standard

and priority BLAs, and the review process is often extended by FDA requests for additional information or clarification.

Before approving a BLA, the FDA will conduct a

pre-approval inspection of the manufacturing facilities for the new product to determine whether they comply with cGMP requirements.

FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements

and adequate to assure consistent production of the product within required specifications.

The FDA also may audit data from clinical

trials to ensure compliance with GCP requirements.

Additionally, the FDA may refer applications for novel products or products which present

difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for

review, evaluation and a recommendation as to whether the application should be approved and under what conditions, if any.

not bound by recommendations of an advisory committee, but it considers such recommendations when making decisions on approval.

likely will reanalyze the clinical trial data, which could result in extensive discussions between the FDA and the applicant during the

review process.

completion of the clinical trials, data are analyzed to assess whether the investigational product is safe and effective for the proposed

indicated use or uses, and also meets the regulatory requirements for potency and purity.

The results of preclinical studies and clinical

trials are then submitted to the FDA as part of a BLA, along with proposed labeling, chemistry and manufacturing information to ensure

product quality and other relevant data.

The BLA is a request for approval to market the biologic for one or more specified indications

and must contain proof of safety, purity and potency.

The application may include both negative and ambiguous results of preclinical

studies and clinical trials, as well as positive findings.

Data may come from company-sponsored clinical trials intended to test the

safety and efficacy of a product’s use or from a number of alternative sources, including studies initiated by investigators.

support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and efficacy in the

intended indication, purity and potency of the investigational product to the satisfaction of the FDA.

FDA approval of a BLA must be

obtained before a biologic may be marketed in the United States.

Under the Prescription Drug User Fee Act, or PDUFA, as amended, each

BLA must be accompanied by a user fee.

The FDA adjusts the PDUFA user fees on an annual basis.

Fee waivers or reductions are available

in certain circumstances, including a waiver of the application fee for the first application filed by a small business.

Additionally,

no user fees are assessed on BLAs for products designated as orphan drugs, unless the product also includes a non-orphan indication.

FDA reviews all submitted BLAs before it accepts them for filing and may request additional information rather than accept the BLA for

The FDA must make a decision on accepting a BLA for filing within 60 days of receipt, and such a decision could include a refusal

to file by the FDA.

Once the submission is accepted for filing, the FDA begins an in-depth review of the BLA.

Under the goals and policies

agreed to by the FDA under PDUFA, the FDA has 10 months, from the filing date, in which to complete its initial review of an original

BLA and respond to the applicant, and six months from the filing date of an original BLA designated for priority review.

not always meet its PDUFA goal dates for standard and priority BLAs, and the review process is often extended by FDA requests for additional

information or clarification.

approving a BLA, the FDA will conduct a pre-approval inspection of the manufacturing facilities for the new product to determine whether

they comply with cGMP requirements.

The FDA will not approve the product unless it determines that the manufacturing processes and facilities

are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.

The FDA also may audit data from clinical trials to ensure compliance with GCP requirements.

Additionally, the FDA may refer applications

for novel products or products which present difficult questions of safety or efficacy to an advisory committee, typically a panel that

includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and

under what conditions, if any.

The FDA is not bound by recommendations of an advisory committee, but it considers such recommendations

when making decisions on approval.

The FDA likely will reanalyze the clinical trial data, which could result in extensive discussions

between the FDA and the applicant during the review process.

the FDA evaluates a BLA, it will issue an approval letter, or a Complete Response Letter.

An approval letter authorizes commercial marketing

of the biologic with specific prescribing information for specific indications.

A Complete Response Letter indicates that the review

cycle of the application is complete and the application will not be approved in its present form.

A Complete Response Letter usually

describes all the specific deficiencies in the BLA identified by the FDA.

The Complete Response Letter may require additional clinical

data and/or other significant and time-consuming requirements related to clinical trials, preclinical studies or manufacturing.

Complete Response Letter is issued, the applicant may either resubmit the BLA, addressing all the deficiencies identified in the letter,

or withdraw the application.

Even if such data and information are submitted, the FDA may decide that the BLA does not satisfy the criteria

for approval.

Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than the sponsor’s

interpretation of the same data.

Drug Designation

the Orphan Drug Act of 1983, or the Orphan Drug Act, the FDA may grant orphan designation to a drug or biological product intended to

treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United

States, or more than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing

and making the product available in the United States for this type of disease or condition will be recovered from sales of the product.

Orphan drug designation for a biologic must be requested before submitting a BLA.

After the FDA grants orphan drug designation, the identity

of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA.

Orphan drug designation does not convey any

advantage in or shorten the duration of the regulatory review and approval process.

After the FDA evaluates a BLA, it will issue an

approval letter, or a Complete Response Letter.

An approval letter authorizes commercial marketing of the biologic with specific prescribing

information for specific indications.

A Complete Response Letter indicates that the review cycle of the application is complete and the

application will not be approved in its present form.

A Complete Response Letter usually describes all the specific deficiencies in the

BLA identified by the FDA.

The Complete Response Letter may require additional clinical data and/or other significant and time-consuming

requirements related to clinical trials, preclinical studies or manufacturing.

If a Complete Response Letter is issued, the applicant

may either resubmit the BLA, addressing all the deficiencies identified in the letter, or withdraw the application.

Even if such data

and information are submitted, the FDA may decide that the BLA does not satisfy the criteria for approval.

Data obtained from clinical

trials are not always conclusive and the FDA may interpret data differently than the sponsor’s interpretation of the same data.

Orphan Drug Designation

Under the Orphan Drug Act of 1983, or the Orphan

Drug Act, the FDA may grant orphan designation to a drug or biological product intended to treat a rare disease or condition, which is

generally a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in

the United States and for which there is no reasonable expectation that the cost of developing and making the product available in the

United States for this type of disease or condition will be recovered from sales of the product.

Orphan drug designation for a biologic

must be requested before submitting a BLA.

After the FDA grants orphan drug designation, the identity of the therapeutic agent and its

potential orphan use are disclosed publicly by the FDA.

Orphan drug designation does not convey any advantage in or shorten the duration

of the regulatory review and approval process.

Orphan drug designation entitles a party to financial

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drug receives marketing approval for an indication broader than that which is designated, it may not be entitled to orphan drug exclusivity.

Development and Review Programs

Expedited Development and Review Programs

The FDA has a fast-track program that is intended

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clinical benefit or if the sponsor fails to conduct such trials in a timely manner.

Additionally,

a drug or biologic may be eligible for designation as a breakthrough therapy if the product is intended, alone or in combination with

one or more other drugs or biologics, to treat a serious or life-threatening condition and preliminary clinical evidence indicates that

the product may demonstrate substantial improvement over currently approved therapies on one or more clinically significant endpoints.

The benefits of breakthrough therapy designation include the same benefits as fast-track designation, plus intensive guidance from the

FDA to ensure an efficient drug development program.

if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for

qualification or the time period for FDA review or approval may not be shortened.

Furthermore, fast track designation, priority review,

accelerated approval and breakthrough therapy designation do not change the standards for approval, but may expedite the development

or approval process.

the Pediatric Research Equity Act of 2003, or PREA, a BLA or supplement to a BLA must contain data to assess the safety and efficacy

of the biologic for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each

pediatric subpopulation for which the product is safe and effective.

The FDA may grant deferrals for submission of pediatric data or

full or partial waivers.

A sponsor who is planning to submit a marketing application for a drug that includes a new active ingredient,

new indication, new dosage form, new dosing regimen or new route of administration must submit an initial Pediatric Study Plan, or PSP,

within 60 days of an end-of-Phase 2 meeting or, if there is no such meeting, as early as practicable before the initiation of the

Phase 3 or Phase 2/3 study.

The initial PSP must include an outline of the pediatric study or studies that the sponsor plans to conduct,

including study objectives and design, age groups, relevant endpoints and statistical approach, or a justification for not including

such detailed information, and any request for a deferral of pediatric assessments or a full or partial waiver of the requirement to

provide data from pediatric studies along with supporting information.

Additionally, a drug or biologic may be eligible

for designation as a breakthrough therapy if the product is intended, alone or in combination with one or more other drugs or biologics,

to treat a serious or life-threatening condition and preliminary clinical evidence indicates that the product may demonstrate substantial

improvement over currently approved therapies on one or more clinically significant endpoints.

The benefits of breakthrough therapy designation

include the same benefits as fast-track designation, plus intensive guidance from the FDA to ensure an efficient drug development program.

Even if a product qualifies for one or more of

these programs, the FDA may later decide that the product no longer meets the conditions for qualification or the time period for FDA

review or approval may not be shortened.

Furthermore, fast track designation, priority review, accelerated approval and breakthrough therapy

designation do not change the standards for approval, but may expedite the development or approval process.

Pediatric Information

Under the Pediatric Research Equity Act of 2003,

or PREA, a BLA or supplement to a BLA must contain data to assess the safety and efficacy of the biologic for the claimed indications

in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product

is safe and effective.

The FDA may grant deferrals for submission of pediatric data or full or partial waivers.

A sponsor who is planning

to submit a marketing application for a drug that includes a new active ingredient, new indication, new dosage form, new dosing regimen

or new route of administration must submit an initial Pediatric Study Plan, or PSP, within 60 days of an end-of-Phase 2 meeting or,

if there is no such meeting, as early as practicable before the initiation of the Phase 3 or Phase 2/3 study.

The initial PSP must include

an outline of the pediatric study or studies that the sponsor plans to conduct, including study objectives and design, age groups, relevant

endpoints and statistical approach, or a justification for not including such detailed information, and any request for a deferral of

pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric studies along with supporting information.

The FDA and the sponsor must reach an agreement on the PSP.

sponsor can submit amendments to an agreed-upon initial PSP at any time if changes to the pediatric plan need to be considered based

on data collected from preclinical studies, early phase clinical trials and/or other clinical development programs.

Post-marketing

approval of a new product, the manufacturer and the approved product are subject to continuing regulation by the FDA, including, among

other things, monitoring and record-keeping activities, reporting of adverse experiences, complying with promotion and advertising requirements,

which include restrictions on promoting products for unapproved uses or patient populations (known as “off-label use”) and

limitations on industry-sponsored scientific and educational activities.

Although physicians may prescribe legally available products

for off-label uses, manufacturers may not market or promote such uses.

Prescription drug and biologic promotional materials must be submitted

to the FDA in conjunction with their first use.

Further, if there are any modifications to the biologic, including changes in indications,

labeling or manufacturing processes or facilities, the applicant may be required to submit and obtain FDA approval of a new BLA or BLA

supplement, which may require the development of additional data or preclinical studies and clinical trials.

FDA may also place other conditions on approvals including the requirement for a Risk Evaluation and Mitigation Strategy, or REMS, to

assure the safe use of the product.

If the FDA concludes a REMS is needed, the sponsor of the BLA must submit a proposed REMS.

will not approve the BLA without an approved REMS, if required.

A REMS could include medication guides, physician communication plans

or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.

these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of products.

Newly discovered or developed safety or effectiveness data may require changes to a product’s approved labeling, including the

addition of new warnings and contraindications, and also may require the implementation of other risk management measures, including

a REMS or the conduct of post-marketing studies to assess a newly discovered safety issue.

Product approvals may be withdrawn for non-compliance

with regulatory standards or if problems occur following initial marketing.

A sponsor can submit amendments to an agreed-upon initial PSP at any time

if changes to the pediatric plan need to be considered based on data collected from preclinical studies, early phase clinical trials and/or

other clinical development programs.

Post-marketing Requirements

Following approval of a new product, the manufacturer

and the approved product are subject to continuing regulation by the FDA, including, among other things, monitoring and record-keeping

activities, reporting of adverse experiences, complying with promotion and advertising requirements, which include restrictions on promoting

products for unapproved uses or patient populations (known as “off-label use”) and limitations on industry-sponsored scientific

and educational activities.

Although physicians may prescribe legally available products for off-label uses, manufacturers may not market

or promote such uses.

Prescription drug and biologic promotional materials must be submitted to the FDA in conjunction with their first

Further, if there are any modifications to the biologic, including changes in indications, labeling or manufacturing processes or

facilities, the applicant may be required to submit and obtain FDA approval of a new BLA or BLA supplement, which may require the development

of additional data or preclinical studies and clinical trials.

The FDA may also place other conditions on approvals

including the requirement for a Risk Evaluation and Mitigation Strategy, or REMS, to assure the safe use of the product.

If the FDA concludes

a REMS is needed, the sponsor of the BLA must submit a proposed REMS.

The FDA will not approve the BLA without an approved REMS, if required.

A REMS could include medication guides, physician communication plans or elements to assure safe use, such as restricted distribution

methods, patient registries and other risk minimization tools.

Any of these limitations on approval or marketing could restrict the commercial

promotion, distribution, prescription or dispensing of products.

Newly discovered or developed safety or effectiveness data may require

changes to a product’s approved labeling, including the addition of new warnings and contraindications, and also may require the

implementation of other risk management measures, including a REMS or the conduct of post-marketing studies to assess a newly discovered

safety issue.

Product approvals may be withdrawn for non-compliance with regulatory standards or if problems occur following initial marketing.

FDA regulations require that products be manufactured

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Biosimilars and Exclusivity

abbreviated approval pathway for biological products shown to be biosimilar to, or interchangeable with, an FDA licensed reference biological

product was created by the Biologics Price Competition and Innovation Act of 2009.

This amendment to the PHSA, in part, attempts to minimize

duplicative testing.

Biosimilarity, which requires that the biological product be highly similar to the reference product notwithstanding

minor differences in clinically inactive components and that there be no clinically meaningful differences between the product and the

reference product in terms of safety, purity and potency, can be shown through analytical studies, animal studies and a clinical trial

Interchangeability

requires that a biological product be biosimilar to the reference product and that the product can be expected to produce the same clinical

results as the reference product in any given patient and, for products administered multiple times to an individual, that the product

and the reference product may be alternated or switched after one has been previously administered without increasing safety risks or

risks of diminished efficacy relative to exclusive use of the reference biological product without such alternation or switch.

reference biological product is granted 12 years of data exclusivity from the time of first licensure of the product, and the FDA will

not accept an application for a biosimilar or interchangeable product based on the reference biological product until four years after

the date of first licensure of the reference product.

“First licensure” typically means the initial date the particular product

at issue was licensed in the United States.

Date of first licensure does not include the date of licensure of (and a new period of exclusivity

is not available for) a biological product if the licensure is for a supplement for the biological product or for a subsequent application

by the same sponsor or manufacturer of the biological product (or licensor, predecessor in interest, or other related entity) for a change

(not including a modification to the structure of the biological product) that results in a new indication, route of administration,

dosing schedule, dosage form, delivery system, delivery device or strength, or for a modification to the structure of the biological

product that does not result in a change in safety, purity, or potency.

exclusivity is another type of regulatory market exclusivity in the United States, available under the Best Pharmaceuticals for Children

Act by way of its application to biologics through the Biologics Price Competition and Innovation Act.

Pediatric exclusivity, if granted,

adds six months to existing regulatory exclusivity periods, which must be in place in order for pediatric exclusivity to apply.

six-month exclusivity may be granted based on the voluntary completion of a pediatric trial in accordance with an FDA issued “Written

Request” for such a trial, although FDA may issue such a Written Request at the request of the sponsor.

may employ companion diagnostics to help it to more accurately identify patients within a particular bacterial strain, both during our

clinical trials and in connection with the commercialization of our product candidates that we are developing or may in the future develop.

Companion diagnostics can identify patients who are most likely to benefit from a particular therapeutic product;

identify patients likely

to be at increased risk for serious side effects as a result of treatment with a particular therapeutic product;

or monitor response

to treatment with a particular therapeutic product for the purpose of adjusting treatment to achieve improved safety or effectiveness.

Companion diagnostics are regulated as medical devices by the FDA and, as such, require either clearance or approval prior to commercialization.

The level of risk combined with available controls to mitigate risk determines whether a companion diagnostic device requires Premarket

Approval Application approval or is cleared through the 510(k) premarket notification process.

For a novel therapeutic product for which

a companion diagnostic device is essential for the safe and effective use of the product, the companion diagnostic device should be developed

and approved or 510(k)-cleared contemporaneously with the therapeutic.

The use of the companion diagnostic device will be stipulated

in the labeling of the therapeutic product.

Regulation Outside of the United States

addition to regulations in the United States, we will be subject to a variety of regulations in other jurisdictions governing, among

other things, clinical trials of drug products as well as the approval, manufacture and distribution of our product candidates.

biologically sourced raw materials are subject to unique contamination risks, their use may be restricted in some countries.

or not we obtain FDA approval for a product candidate, we must obtain the requisite approvals from regulatory authorities in foreign

countries prior to the commencement of clinical trials or marketing of the product in those countries.

If we fail to comply with applicable

foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product

recalls, seizure of products, operating restrictions and criminal prosecution.

countries outside of the United States have a regulatory process similar to the U.S process that requires the submission of a clinical

trial application much like the IND prior to the commencement of human clinical trials.

In the European Union, for example, a clinical

trial application, or CTA, must be submitted for each clinical trial to the national health authority and an independent ethics committee

in each country in which the trial is to be conducted, much like the FDA and an IRB, respectively.

CTAs must be accompanied by an investigational

medicinal product dossier with supporting information prescribed by the Clinical Trials Directive (and corresponding national laws of

the member states) and further detailed in applicable guidance documents.

Once the CTA is approved in accordance with a country’s

requirements, the clinical trial may proceed.

A similar process to the one described for the European Union is required in Israel for

initiation of clinical trials.

The requirements and process governing the conduct of clinical trials vary from country to country.

all cases, the clinical trials must be conducted in accordance with GCP and the applicable regulatory requirements and the ethical principles

that have their origin in the Declaration of Helsinki.

order to market our products, we must obtain a marketing approval for each product and comply with numerous and varying regulatory requirements.

The approval procedure varies among countries and can involve additional testing in comparison to the testing carried out for the U.S.

The time required to obtain approval in foreign countries may differ substantially from that required to obtain FDA approval.

Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries.

The regulatory approval process

outside the United States generally is subject to all of the same risks associated with obtaining FDA approval.

In addition, in many

countries outside the United States, it is required that the product be approved for reimbursement before the product can be approved

for sale in that country.

obtain marketing approval of a medicinal product under the European Union regulatory system, an applicant must submit a marketing authorization

application, or MAA, under either a centralized or a decentralized procedure.

The decentralized procedure is based on a collaboration

among the member states selected by the applicant.

In essence, the applicant chooses a ‘lead’ member state that will carry

out the scientific assessment of the MAA and review the product information.

The other member states must recognize the outcome of such

assessment and review except in case of a “serious potential risk to public health.” The decentralized procedure results

in the grant of a national marketing authorization in each selected country.

That procedure is available for all medicinal products unless

they fall into the mandatory scope of the centralized procedure.

In practice, it is used for OTC, not highly innovative products, generic

products and, increasingly, for biosimilars.

centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid for all European

Union member states.

The centralized procedure is compulsory for certain medicinal products, including for medicinal products produced

by certain biotechnological processes, products designated as orphan medicinal products, advanced therapy medicinal products, or ATMPs,

and products with a new active substance and indicated for the treatment of certain diseases.

For products with a new active substance

and indicated for the treatment of other diseases, products that are highly innovative or for which a centralized process is in the interest

of patients, the centralized procedure is optional.

the centralized procedure, the Committee for Medicinal Products for Human Use, or CHMP, the main scientific committee established at

the European Medicines Agency, or EMA, is responsible for conducting the scientific assessment of the future medicinal product.

is also responsible for several post-authorization and maintenance activities, such as the assessment of modifications or extensions

to an existing marketing authorization.

The maximum timeframe for the evaluation of an MAA is 210 days, excluding clock stops.

Commission grants or refuses the marketing authorization, following a procedure that involves representatives of the member states.

European Commission’s decision is in accordance with the CHMP scientific assessment except in very rare cases.

to Regulation (EC) 1394/2007, specific rules apply to ATMPs, a category that is comprised of gene therapy medical products, somatic cell

therapy medicinal products, and tissue-engineered medicinal products.

Those rules have triggered the adoption of guidelines on manufacturing,

clinical trials and pharmacovigilance that adapt the general regulatory requirements to the specific characteristics of ATMPs.

(EC) 1394/2007 introduced a “hospital exemption.” which authorizes hospitals to develop ATMP for their internal use without

having obtained a marketing authorization and to complying with European Union pharmaceutical law.

The hospital exemption, which is in

essence a compounded ATMP, has been transposed in all Member States, sometimes in such a way that the ATMPs under the hospital exemption

are competitive alternatives to ATMPs with marketing authorization.

The broad use of the hospital exemption by national hospitals led

the European Commission to discuss with the Member States a more reasonable application of the hospital exemption that would not undermine

the common legal regime for ATMP.

authorization is valid for five years in principle and the marketing authorization may be renewed after five years on the basis of a

re-evaluation of the risk-benefit balance by the EMA or the competent authority of the authorizing member state.

To this end, the marketing

authorization holder must provide the EMA or the competent authority with a consolidated version of the file in respect of quality, safety

and efficacy, including all variations introduced since the marketing authorization was granted, at least six months before the marketing

authorization ceases to be valid.

Once renewed, the marketing authorization is valid for an unlimited period, unless the European Commission

or the national competent authority decides, on justified grounds relating to pharmacovigilance, to proceed with one additional renewal.

Any authorization which is not followed by the actual placing of the medicinal product on the European Union market (in case of centralized

procedure) or on the market of the authorizing member state within three years after authorization ceases to be valid (the so-called

sunset clause).

other than the United States have adopted a specific legal regime to support the development and marketing of drugs and biologics for

rare diseases.

example, in the European Union, Regulation 141/2000 organizes the grant of orphan drug designations to promote the development of products

that are intended for the diagnosis, prevention or treatment of life threatening or chronically debilitating conditions affecting not

more than five in 10,000 persons in the European Economic Area (the European Union, plus Iceland, Liechtenstein and Norway), or EEA,

(or where it is unlikely that the development of the medicine would generate sufficient return to justify the investment) and for which

no satisfactory method of diagnosis, prevention or treatment has been authorized or, if a method exists, the product would be of significant

benefit to those affected.

The EMA’s Committee for Orphan Medicinal Products, or COMP, examines if the orphan criteria are met

and gives opinions thereon, and the orphan status is granted by the European Commission.

The meeting of the criteria for orphan designation

is examined again by the COMP at the time of approval of the medicinal product, which typically occurs several years after the grant

of the orphan designation.

If the criteria for orphan designation are no longer met at that time, the European Commission withdraws the

orphan status.

the European Union, orphan drug designation entitles the sponsor to financial incentives such as reduction of fees or fee waivers and

to ten years of market exclusivity granted following medicinal product approval.

Market exclusivity precludes the EMA or a national regulatory

authority from validating another MAA, and the European Commission or a national regulatory authority from granting another marketing

authorization, for a same or similar medicinal product and a same therapeutic indication, for that time period.

This 10-year period may

be reduced to six years if the orphan drug designation criteria are no longer met, including where it is shown that the product is sufficiently

profitable not to justify maintenance of market exclusivity.

The orphan exclusivity may be lost vis-à-vis another medicinal product

in cases the manufacturer is unable to assure sufficient quantity of the medicinal product to meet patient needs or if that other product

is proved to be clinically superior to the approved orphan product.

A drug is clinically superior if it is safer, more effective or makes

a major contribution to patient care.

Orphan drug designation must be requested before submitting a MAA.

Orphan drug designation does

not convey any advantage in, or shorten the duration of, the regulatory review and approval process, and it does not afford any regulatory

exclusivity until a marketing authorization is granted.

Development and Approval

are in place in many jurisdictions that allow an earlier approval of the drug so that it reaches patients with unmet medical needs earlier.

The European Union, for example, has instituted several expedited approval mechanisms including two mechanisms that are specific to the

centralized procedure:

An abbreviated approval pathway for biological

products shown to be biosimilar to, or interchangeable with, an FDA licensed reference biological product was created by the Biologics

Price Competition and Innovation Act of 2009.

This amendment to the PHSA, in part, attempts to minimize duplicative testing.

Biosimilarity,

which requires that the biological product be highly similar to the reference product notwithstanding minor differences in clinically

inactive components and that there be no clinically meaningful differences between the product and the reference product in terms of safety,

purity and potency, can be shown through analytical studies, animal studies and a clinical trial or trials.

Interchangeability requires that a biological product

be biosimilar to the reference product and that the product can be expected to produce the same clinical results as the reference product

in any given patient and, for products administered multiple times to an individual, that the product and the reference product may be

alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative

to exclusive use of the reference biological product without such alternation or switch.

A reference biological product is granted 12 years

of data exclusivity from the time of first licensure of the product, and the FDA will not accept an application for a biosimilar or interchangeable

product based on the reference biological product until four years after the date of first licensure of the reference product.

licensure” typically means the initial date the particular product at issue was licensed in the United States.

Date of first licensure

does not include the date of licensure of (and a new period of exclusivity is not available for) a biological product if the licensure

is for a supplement for the biological product or for a subsequent application by the same sponsor or manufacturer of the biological product

(or licensor, predecessor in interest, or other related entity) for a change (not including a modification to the structure of the biological

product) that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device or

strength, or for a modification to the structure of the biological product that does not result in a change in safety, purity, or potency.

Pediatric exclusivity is another type of regulatory

market exclusivity in the United States, available under the Best Pharmaceuticals for Children Act by way of its application to biologics

through the Biologics Price Competition and Innovation Act.

Pediatric exclusivity, if granted, adds six months to existing regulatory

exclusivity periods, which must be in place in order for pediatric exclusivity to apply.

This six-month exclusivity may be granted based

on the voluntary completion of a pediatric trial in accordance with an FDA issued “Written Request” for such a trial, although

FDA may issue such a Written Request at the request of the sponsor.

Companion Diagnostics

We may employ companion diagnostics to help it

to more accurately identify patients within a particular bacterial strain, both during our clinical trials and in connection with the

commercialization of our product candidates that we are developing or may in the future develop.

Companion diagnostics can identify patients

who are most likely to benefit from a particular therapeutic product;

identify patients likely to be at increased risk for serious side

effects as a result of treatment with a particular therapeutic product;

or monitor response to treatment with a particular therapeutic

product for the purpose of adjusting treatment to achieve improved safety or effectiveness.

Companion diagnostics are regulated as medical

devices by the FDA and, as such, require either clearance or approval prior to commercialization.

The level of risk combined with available

controls to mitigate risk determines whether a companion diagnostic device requires Premarket Approval Application approval or is cleared

through the 510(k) premarket notification process.

For a novel therapeutic product for which a companion diagnostic device is essential

for the safe and effective use of the product, the companion diagnostic device should be developed and approved or 510(k)-cleared contemporaneously

with the therapeutic.

The use of the companion diagnostic device will be stipulated in the labeling of the therapeutic product.

Government Regulation Outside of the United States

In addition to regulations in the United States,

we will be subject to a variety of regulations in other jurisdictions governing, among other things, clinical trials of drug products

as well as the approval, manufacture and distribution of our product candidates.

Because biologically sourced raw materials are subject

to unique contamination risks, their use may be restricted in some countries.

Whether or not we obtain FDA approval for a product candidate,

we must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or

marketing of the product in those countries.

If we fail to comply with applicable foreign regulatory requirements, we may be subject to,

among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions

and criminal prosecution.

Clinical Trials

Certain countries outside of the United States

have a regulatory process similar to the U.S process that requires the submission of a clinical trial application much like the IND prior

to the commencement of human clinical trials.

In the European Union, for example, a clinical trial application, or CTA, must be submitted

for each clinical trial to the national health authority and an independent ethics committee in each country in which the trial is to

be conducted, much like the FDA and an IRB, respectively.

CTAs must be accompanied by an investigational medicinal product dossier with

supporting information prescribed by the Clinical Trials Directive (and corresponding national laws of the member states) and further

detailed in applicable guidance documents.

Once the CTA is approved in accordance with a country’s requirements, the clinical trial

A similar process to the one described for the European Union is required in Israel for initiation of clinical trials.

requirements and process governing the conduct of clinical trials vary from country to country.

In all cases, the clinical trials must

be conducted in accordance with GCP and the applicable regulatory requirements and the ethical principles that have their origin in the

Declaration of Helsinki.

Approval Process

In order to market our products, we must obtain

a marketing approval for each product and comply with numerous and varying regulatory requirements.

The approval procedure varies among

countries and can involve additional testing in comparison to the testing carried out for the U.S.

The time required to obtain

approval in foreign countries may differ substantially from that required to obtain FDA approval.

Clinical trials conducted in one country

may not be accepted by regulatory authorities in other countries.

The regulatory approval process outside the United States generally

is subject to all of the same risks associated with obtaining FDA approval.

In addition, in many countries outside the United States,

it is required that the product be approved for reimbursement before the product can be approved for sale in that country.

To obtain marketing approval of a medicinal product

under the European Union regulatory system, an applicant must submit a marketing authorization application, or MAA, under either a centralized

or a decentralized procedure.

The decentralized procedure is based on a collaboration among the member states selected by the applicant.

In essence, the applicant chooses a ‘lead’ member state that will carry out the scientific assessment of the MAA and review

the product information.

The other member states must recognize the outcome of such assessment and review except in case of a “serious

potential risk to public health.” The decentralized procedure results in the grant of a national marketing authorization in each

selected country.

That procedure is available for all medicinal products unless they fall into the mandatory scope of the centralized

In practice, it is used for OTC, not highly innovative products, generic products and, increasingly, for biosimilars.

The centralized procedure provides for the grant

of a single marketing authorization by the European Commission that is valid for all European Union member states.

The centralized procedure

is compulsory for certain medicinal products, including for medicinal products produced by certain biotechnological processes, products

designated as orphan medicinal products, advanced therapy medicinal products, or ATMPs, and products with a new active substance and indicated

for the treatment of certain diseases.

For products with a new active substance and indicated for the treatment of other diseases, products

that are highly innovative or for which a centralized process is in the interest of patients, the centralized procedure is optional.

Under the centralized procedure, the Committee

for Medicinal Products for Human Use, or CHMP, the main scientific committee established at the European Medicines Agency, or EMA, is

responsible for conducting the scientific assessment of the future medicinal product.

The CHMP is also responsible for several post-authorization

and maintenance activities, such as the assessment of modifications or extensions to an existing marketing authorization.

timeframe for the evaluation of an MAA is 210 days, excluding clock stops.

The European Commission grants or refuses the marketing authorization,

following a procedure that involves representatives of the member states.

The European Commission’s decision is in accordance with

the CHMP scientific assessment except in very rare cases.

Pursuant to Regulation (EC) 1394/2007, specific

rules apply to ATMPs, a category that is comprised of gene therapy medical products, somatic cell therapy medicinal products, and tissue-engineered

medicinal products.

Those rules have triggered the adoption of guidelines on manufacturing, clinical trials and pharmacovigilance that

adapt the general regulatory requirements to the specific characteristics of ATMPs.

Regulation (EC) 1394/2007 introduced a “hospital

exemption.” which authorizes hospitals to develop ATMP for their internal use without having obtained a marketing authorization

and to complying with European Union pharmaceutical law.

The hospital exemption, which is in essence a compounded ATMP, has been transposed

in all Member States, sometimes in such a way that the ATMPs under the hospital exemption are competitive alternatives to ATMPs with marketing

authorization.

The broad use of the hospital exemption by national hospitals led the European Commission to discuss with the Member States

a more reasonable application of the hospital exemption that would not undermine the common legal regime for ATMP.

Marketing authorization is valid for five years

in principle and the marketing authorization may be renewed after five years on the basis of a re-evaluation of the risk-benefit balance

by the EMA or the competent authority of the authorizing member state.

To this end, the marketing authorization holder must provide the

EMA or the competent authority with a consolidated version of the file in respect of quality, safety and efficacy, including all variations

introduced since the marketing authorization was granted, at least six months before the marketing authorization ceases to be valid.

renewed, the marketing authorization is valid for an unlimited period, unless the European Commission or the national competent authority

decides, on justified grounds relating to pharmacovigilance, to proceed with one additional renewal.

Any authorization which is not followed

by the actual placing of the medicinal product on the European Union market (in case of centralized procedure) or on the market of the

authorizing member state within three years after authorization ceases to be valid (the so-called sunset clause).

Orphan Designation

Countries other than the United States have adopted

a specific legal regime to support the development and marketing of drugs and biologics for rare diseases.

For example, in the European Union, Regulation

141/2000 organizes the grant of orphan drug designations to promote the development of products that are intended for the diagnosis, prevention

or treatment of life threatening or chronically debilitating conditions affecting not more than five in 10,000 persons in the European

Economic Area (the European Union, plus Iceland, Liechtenstein and Norway), or EEA, (or where it is unlikely that the development of the

medicine would generate sufficient return to justify the investment) and for which no satisfactory method of diagnosis, prevention or

treatment has been authorized or, if a method exists, the product would be of significant benefit to those affected.

The EMA’s Committee

for Orphan Medicinal Products, or COMP, examines if the orphan criteria are met and gives opinions thereon, and the orphan status is granted

by the European Commission.

The meeting of the criteria for orphan designation is examined again by the COMP at the time of approval of

the medicinal product, which typically occurs several years after the grant of the orphan designation.

If the criteria for orphan designation

are no longer met at that time, the European Commission withdraws the orphan status.

In the European Union, orphan drug designation

entitles the sponsor to financial incentives such as reduction of fees or fee waivers and to ten years of market exclusivity granted following

medicinal product approval.

Market exclusivity precludes the EMA or a national regulatory authority from validating another MAA, and the

European Commission or a national regulatory authority from granting another marketing authorization, for a same or similar medicinal

product and a same therapeutic indication, for that time period.

This 10-year period may be reduced to six years if the orphan drug designation

criteria are no longer met, including where it is shown that the product is sufficiently profitable not to justify maintenance of market

The orphan exclusivity may be lost vis-à-vis another medicinal product in cases the manufacturer is unable to assure

sufficient quantity of the medicinal product to meet patient needs or if that other product is proved to be clinically superior to the

approved orphan product.

A drug is clinically superior if it is safer, more effective or makes a major contribution to patient care.

drug designation must be requested before submitting a MAA.

Orphan drug designation does not convey any advantage in, or shorten the duration

of, the regulatory review and approval process, and it does not afford any regulatory exclusivity until a marketing authorization is granted.

Expedited Development and Approval

Mechanisms are in place in many jurisdictions that

allow an earlier approval of the drug so that it reaches patients with unmet medical needs earlier.

The European Union, for example, has

instituted several expedited approval mechanisms including two mechanisms that are specific to the centralized procedure:

● the accelerated approval:

the EMA may reduce the maximum

timeframe for the evaluation of an MAA from 210 days to 150 days when the future medicinal product is of major interest from the

point of view of public health, in particular from the viewpoint of therapeutic innovation.

EMA may reduce the maximum timeframe for the evaluation of an MAA from 210 days to 150 days when the future medicinal product is of major

interest from the point of view of public health, in particular from the viewpoint of therapeutic innovation.

● the conditional marketing authorization:

its marketing authorization process, the European Commission may grant marketing authorizations on the basis of less complete data

than is normally required.

conditional marketing authorization may be granted when the CHMP finds that, although comprehensive clinical data referring to the safety

and efficacy of the medicinal product have not been supplied, all the following requirements are met:

the risk/benefit balance of the medicinal product is

it is likely that the applicant will be in a position

to provide the comprehensive clinical data;

unmet medical needs will be addressed;

the benefit to public health of the immediate availability

on the market of the medicinal product concerned outweighs the risk inherent in the fact that additional data is still required.

granting of a conditional marketing authorization is typically restricted to situations in which only the clinical part of the application

is not yet fully complete.

Incomplete preclinical or quality data may however be accepted if duly justified and only in the case of a

product intended to be used in emergency situations in response to public health threats.

marketing authorizations are valid for one year, on a renewable basis.

The conditions to which approval is subject will typically require

the holder to complete ongoing trials or to conduct new trials with a view to confirming that the benefit-risk balance is positive and

to collect pharmacovigilance data.

Once the conditions to which the marketing authorization is subject are fulfilled, the conditional

marketing authorization is transformed into a regular marketing authorization.

If, however, the conditions are not fulfilled with the

timeframe set by EMA, the conditional marketing authorization ceases to be renewed.

EMA has also implemented the so-called “PRIME” (PRIority MEdicines) status in order support the development and accelerate

the approval of complex innovative medicinal products addressing an unmet medical need.

PRIME status enables early dialogue with the

relevant EMA scientific committees and, possibly, some payors and thus reinforces the EMA’s scientific and regulatory support.

It also opens accelerated assessment of the MAA as PRIME status, is normally reserved for medicinal products that may benefit from accelerated

assessment, i.e., medicines of major interest from a public health perspective, in particular from a therapeutic innovation perspective.

all medicinal products (i.e.

decentralized and centralized procedures) may benefit from an MA “under exceptional circumstances.”

This marketing authorization is close to the conditional marketing authorization as it is reserved to medicinal products to be approved

for severe diseases or unmet medical needs and the applicant does not hold the complete data set legally required for the grant of a

marketing authorization.

However, unlike the conditional marketing authorization, the applicant does not have to provide the missing

data and will never have to.

The risk-benefit of the medicinal product is reviewed annually.

As a result, although the MA “under

exceptional circumstances” is granted definitively, the risk-benefit balance of the medicinal product is reviewed annually and

the marketing authorization is withdrawn in case the risk-benefit ratio is no longer favorable.

testing in the pediatric population is required in more and more jurisdictions.

The European Union has enacted a complex and very stringent

system that has inspired other jurisdictions, including the United States and Switzerland.

Any application for approval of (i) a medicinal

product containing a new active substance or (ii) a new therapeutic indication, pharmaceutical form or route of administration of

an already authorized medicinal product which contains an active substance still protected by a supplementary protection certificate,

or SPC, or a patent that qualifies for an SPC, must include pediatric data.

Otherwise, the application is not validated by the competent

regulatory authority.

The submission of pediatric data is mandatory in those cases, even if the application concerns an adult use.

of pediatric data is not required or fully required if the EMA granted, respectively, a full or partial waiver to pediatric development.

Moreover, that submission can be postponed if the EMA grants a deferral in order not to delay the submission of the MAA for the adult

pediatric data are generated through the implementation of a pediatric investigation plan, or PIP, that is proposed by the company after

completion of the PK studies in adults and agreed upon by the EMA, typically after some modifications.

The PIP lists all the studies

to conduct and measures to take in order to prove the safety and efficacy of the future medicinal product when used in children.

EMA may agree to modify the PIP at the company’s request.

The scope of the PIP is the adult therapeutic indication or the condition

of which the adult application is part or even the mechanism of action of the active substance, at the EMA’s quasi-discretion.

This very broad discretion enables the EMA to require companies to develop children indications that are different from the adult indications.

of a PIP renders the company eligible for a pediatric reward, which can be six-month extension of the term of the SPC or, in the cases

of orphan medicinal products, two additional years of market exclusivity.

The reward is subject, among other conditions, to the PIP being

fully completed, to the pediatric medicinal product being approved in all the member states, and to the results of the pediatric studies

being mentioned, in one way or another (for example, the approval of a pediatric indication), in the summary of product characteristics

of the product.

Post-Marketing

countries impose post-marketing requirements similar to those imposed in the United States, in particular safety monitoring or pharmacovigilance.

In the European Union, pharmacovigilance data are the basis for the competent regulatory authorities imposing the conduct of post-approval

safety or efficacy study, including on off-label use.

Non-compliance with those requirements can result in significant financial penalties

as well as the suspension or withdrawal of the marketing authorization.

Supplementary

Protection Certificate and Regulatory Exclusivities

some countries other than the United States, some of our patents may be eligible for limited patent term extension, depending upon the

timing, duration and specifics of the regulatory approval of our product candidates and any future product candidates.

Furthermore, authorized

drugs and biologics may benefit from regulatory exclusivities (in additional to patent protection resulting from patents).

the European Union, Regulation (EC) 469/2009 institutes SPCs.

An SPC is an extension of the term of a patent that compensates for the

patent protection lost because of the legal requirements to conduct safety and efficacy tests and to obtain a marketing authorization

before placing a medicinal product on the market.

An SPC may be applied for any active substance that is protected by a “basic

patent” (a patent chosen by the patent holder, which can be a product, process or application patent) and has not been placed on

the market as a medicinal product before having obtained a marketing authorization in accordance with European Union pharmaceutical law.

The term of the SPC is maximum five years, and the combined patent and SPC protection may not exceed fifteen years from the date of the

first marketing authorization in the EEA.

SPC rights are restricted by both the basic patent and the marketing authorization, i.e., the

SPC grants the same rights as those conferred by the basic patent but limited to the active substance covered by the marketing authorization

(and any use as medicinal product approved afterwards).

SPC are regulated at the European level, they are granted by the national patent offices.

The grant of an SPC requires a basic patent

granted by the national patent office and a marketing authorization, which is the first marketing authorization for the active substance

as a medicinal product in the country.

Furthermore, no SPC must have already been granted to the active substance, and the application

for the SPC must be filed with the national patent office within six months of the first marketing authorization in the EEA or the grant

of the basic patent, whichever is the latest.

the future, we may apply for an SPC for one or more of our currently owned or licensed European patents to add patent life beyond their

current expiration date, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant

in the European Union, medicinal products may benefit from the following regulatory exclusivities:

data exclusivity, market protection,

market exclusivity, and pediatric reward.

medicinal product that contains a new active substance (reference medicinal product) is granted eight years of data exclusivity followed

by two years of market protection.

Data exclusivity prevents other companies from referring to the non-clinical and clinical data in

marketing authorization dossier of the reference medicinal product for submission of generic MAA purposes, and market protection prevents

other companies from placing generics on the market.

Pursuant to the concept of global marketing authorization, any further development

of that medicinal product (e.g., new indication, new form, change to the active substance) by the marketing authorization holder does

not trigger any new or additional protection.

The authorization of any new development is considered as “falling” into the

initial marketing authorization with regard to regulatory protection;

hence, the new development only benefits from the regulatory protection

that remains when it is authorized.

The only exception is a new therapeutic indication that is considered as bringing a significant clinical

benefit in comparison to the existing therapies.

Such new indication will add one-year of market protection to the global marketing authorization,

provided that it is authorized within the first eight years of authorization (i.e., during the data exclusivity period).

new therapeutic indication of a “well-established substance” benefits from one-year data exclusivity but limited to the non-clinical

and clinical data supporting the new indication.

Any active substance approved for at least ten years in the EEA qualifies as well-established

may be approved through an abbreviated approval pathway after the expiration of the eight-year data exclusivity period and may be marketed

after the 10 or 11-year market protection period.

The approval of biosimilars requires the applicant to demonstrate similarity between

the biosimilar and the biological medicinal product and to submit the non-clinical and clinical data defined by the EMA.

The biosimilar

legal regime has been mainly developed through EMA’s scientific guidelines applicable to categories of biological active substances.

Unlike in the United States, interchangeability is regulated by each member state.

exclusivity is a regulatory protection exclusively afforded to medicinal products with an orphan status.

Market exclusivity precludes

the EMA or a national regulatory authority from validating another MAA, and the European Commission or a national regulatory authority

from granting another marketing authorization, for a same or similar medicinal product and a same therapeutic indication, for a period

of ten years from approval (see above).

reward is another regulatory exclusivity.

Completion of a PIP renders the company eligible for a pediatric reward, which can be six-month

extension of the term of the SPC or, in the cases of orphan medicinal products, two additional years of market exclusivity (see above).

In case a PIP is completed on a voluntary basis, i.e., for an approved medicinal product that is not or no longer protected by an SPC

or a basic patent, the pediatric reward takes the form of a “pediatric use marketing authorization”, or PUMA.

authorization does not fall into the global marketing authorization and thus benefits from eight years of data exclusivity followed by

two or three years of market protection.

as part of its marketing authorization process, the European Commission may grant marketing authorizations on the basis of less complete

data than is normally required.

A conditional marketing authorization may be granted

when the CHMP finds that, although comprehensive clinical data referring to the safety and efficacy of the medicinal product have not

been supplied, all the following requirements are met:

● the risk/benefit balance of

the medicinal product is positive;

● it is likely that the applicant

will be in a position to provide the comprehensive clinical data;

● unmet medical needs will be

● the benefit to public health

of the immediate availability on the market of the medicinal product concerned outweighs the risk inherent in the fact that additional

data is still required.

The granting of a conditional marketing authorization

is typically restricted to situations in which only the clinical part of the application is not yet fully complete.

Incomplete preclinical

or quality data may however be accepted if duly justified and only in the case of a product intended to be used in emergency situations

in response to public health threats.

Conditional marketing authorizations are valid

for one year, on a renewable basis.

The conditions to which approval is subject will typically require the holder to complete ongoing

trials or to conduct new trials with a view to confirming that the benefit-risk balance is positive and to collect pharmacovigilance data.

Once the conditions to which the marketing authorization is subject are fulfilled, the conditional marketing authorization is transformed

into a regular marketing authorization.

If, however, the conditions are not fulfilled with the timeframe set by EMA, the conditional marketing

authorization ceases to be renewed.

The EMA has also implemented the so-called “PRIME”

(PRIority MEdicines) status in order support the development and accelerate the approval of complex innovative medicinal products addressing

an unmet medical need.

PRIME status enables early dialogue with the relevant EMA scientific committees and, possibly, some payors and

thus reinforces the EMA’s scientific and regulatory support.

It also opens accelerated assessment of the MAA as PRIME status, is

normally reserved for medicinal products that may benefit from accelerated assessment, i.e., medicines of major interest from a public

health perspective, in particular from a therapeutic innovation perspective.

Finally, all medicinal products (i.e.

decentralized

and centralized procedures) may benefit from an MA “under exceptional circumstances.” This marketing authorization is close

to the conditional marketing authorization as it is reserved to medicinal products to be approved for severe diseases or unmet medical

needs and the applicant does not hold the complete data set legally required for the grant of a marketing authorization.

However, unlike

the conditional marketing authorization, the applicant does not have to provide the missing data and will never have to.

The risk-benefit

of the medicinal product is reviewed annually.

As a result, although the MA “under exceptional circumstances” is granted definitively,

the risk-benefit balance of the medicinal product is reviewed annually and the marketing authorization is withdrawn in case the risk-benefit

ratio is no longer favorable.

Mandatory testing in the pediatric population is

required in more and more jurisdictions.

The European Union has enacted a complex and very stringent system that has inspired other jurisdictions,

including the United States and Switzerland.

Any application for approval of (i) a medicinal product containing a new active substance

or (ii) a new therapeutic indication, pharmaceutical form or route of administration of an already authorized medicinal product which

contains an active substance still protected by a supplementary protection certificate, or SPC, or a patent that qualifies for an SPC,

must include pediatric data.

Otherwise, the application is not validated by the competent regulatory authority.

The submission of pediatric

data is mandatory in those cases, even if the application concerns an adult use.

Submission of pediatric data is not required or fully

required if the EMA granted, respectively, a full or partial waiver to pediatric development.

Moreover, that submission can be postponed

if the EMA grants a deferral in order not to delay the submission of the MAA for the adult population.

The pediatric data are generated through the implementation

of a pediatric investigation plan, or PIP, that is proposed by the company after completion of the PK studies in adults and agreed upon

by the EMA, typically after some modifications.

The PIP lists all the studies to conduct and measures to take in order to prove the safety

and efficacy of the future medicinal product when used in children.

The EMA may agree to modify the PIP at the company’s request.

The scope of the PIP is the adult therapeutic indication or the condition of which the adult application is part or even the mechanism

of action of the active substance, at the EMA’s quasi-discretion.

This very broad discretion enables the EMA to require companies

to develop children indications that are different from the adult indications.

Completion of a PIP renders the company eligible

for a pediatric reward, which can be six-month extension of the term of the SPC or, in the cases of orphan medicinal products, two additional

years of market exclusivity.

The reward is subject, among other conditions, to the PIP being fully completed, to the pediatric medicinal

product being approved in all the member states, and to the results of the pediatric studies being mentioned, in one way or another (for

example, the approval of a pediatric indication), in the summary of product characteristics of the product.

Post-Marketing Requirements

Many countries impose post-marketing requirements

similar to those imposed in the United States, in particular safety monitoring or pharmacovigilance.

In the European Union, pharmacovigilance

data are the basis for the competent regulatory authorities imposing the conduct of post-approval safety or efficacy study, including

on off-label use.

Non-compliance with those requirements can result in significant financial penalties as well as the suspension or withdrawal

of the marketing authorization.

Supplementary Protection Certificate and Regulatory Exclusivities

In some countries other than the United States,

some of our patents may be eligible for limited patent term extension, depending upon the timing, duration and specifics of the regulatory

approval of our product candidates and any future product candidates.

Furthermore, authorized drugs and biologics may benefit from regulatory

exclusivities (in additional to patent protection resulting from patents).

In the European Union, Regulation (EC) 469/2009

institutes SPCs.

An SPC is an extension of the term of a patent that compensates for the patent protection lost because of the legal requirements

to conduct safety and efficacy tests and to obtain a marketing authorization before placing a medicinal product on the market.

may be applied for any active substance that is protected by a “basic patent” (a patent chosen by the patent holder, which

can be a product, process or application patent) and has not been placed on the market as a medicinal product before having obtained a

marketing authorization in accordance with European Union pharmaceutical law.

The term of the SPC is maximum five years, and the combined

patent and SPC protection may not exceed fifteen years from the date of the first marketing authorization in the EEA.

SPC rights are restricted

by both the basic patent and the marketing authorization, i.e., the SPC grants the same rights as those conferred by the basic patent

but limited to the active substance covered by the marketing authorization (and any use as medicinal product approved afterwards).

While SPC are regulated at the European level,

they are granted by the national patent offices.

The grant of an SPC requires a basic patent granted by the national patent office and

a marketing authorization, which is the first marketing authorization for the active substance as a medicinal product in the country.

Furthermore, no SPC must have already been granted to the active substance, and the application for the SPC must be filed with the national

patent office within six months of the first marketing authorization in the EEA or the grant of the basic patent, whichever is the latest.

In the future, we may apply for an SPC for one

or more of our currently owned or licensed European patents to add patent life beyond their current expiration date, depending on the

expected length of the clinical trials and other factors involved in the filing of the relevant MAA.

Furthermore, in the European Union, medicinal products

may benefit from the following regulatory exclusivities:

data exclusivity, market protection, market exclusivity, and pediatric reward.

A medicinal product that contains a new active

substance (reference medicinal product) is granted eight years of data exclusivity followed by two years of market protection.

Data exclusivity

prevents other companies from referring to the non-clinical and clinical data in marketing authorization dossier of the reference medicinal

product for submission of generic MAA purposes, and market protection prevents other companies from placing generics on the market.

to the concept of global marketing authorization, any further development of that medicinal product (e.g., new indication, new form, change

to the active substance) by the marketing authorization holder does not trigger any new or additional protection.

The authorization of

any new development is considered as “falling” into the initial marketing authorization with regard to regulatory protection;

hence, the new development only benefits from the regulatory protection that remains when it is authorized.

The only exception is a new

therapeutic indication that is considered as bringing a significant clinical benefit in comparison to the existing therapies.

indication will add one-year of market protection to the global marketing authorization, provided that it is authorized within the first

eight years of authorization (i.e., during the data exclusivity period).

Moreover, a new therapeutic indication of a “well-established

substance” benefits from one-year data exclusivity but limited to the non-clinical and clinical data supporting the new indication.

Any active substance approved for at least ten years in the EEA qualifies as well-established substance.

Biosimilars may be approved through an abbreviated

approval pathway after the expiration of the eight-year data exclusivity period and may be marketed after the 10 or 11-year market protection

The approval of biosimilars requires the applicant to demonstrate similarity between the biosimilar and the biological medicinal

product and to submit the non-clinical and clinical data defined by the EMA.

The biosimilar legal regime has been mainly developed through

EMA’s scientific guidelines applicable to categories of biological active substances.

Unlike in the United States, interchangeability

is regulated by each member state.

Market exclusivity is a regulatory protection exclusively

afforded to medicinal products with an orphan status.

Market exclusivity precludes the EMA or a national regulatory authority from validating

another MAA, and the European Commission or a national regulatory authority from granting another marketing authorization, for a same

or similar medicinal product and a same therapeutic indication, for a period of ten years from approval (see above).

Pediatric reward is another regulatory exclusivity.

Completion of a PIP renders the company eligible for a pediatric reward, which can be six-month extension of the term of the SPC or, in

the cases of orphan medicinal products, two additional years of market exclusivity (see above).

In case a PIP is completed on a voluntary

basis, i.e., for an approved medicinal product that is not or no longer protected by an SPC or a basic patent, the pediatric reward takes

the form of a “pediatric use marketing authorization”, or PUMA.

That special authorization does not fall into the global marketing

authorization and thus benefits from eight years of data exclusivity followed by two or three years of market protection.

Healthcare Laws and Compliance Requirements

4 unchanged sentences

The laws that may affect our ability to operate include:

the federal Anti-Kickback Statute, which prohibits,

among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe,

or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of

an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for which payment may be made,

in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs;

a person or entity does not

need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation.

● the federal Anti-Kickback Statute,

which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any

kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the

referral of an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for which payment may

be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs;

a person or entity does

not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation.

In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback

Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act or federal civil money penalties statute;

federal civil and criminal false claims laws and civil

monetary penalties laws, such as the federal False Claims Act, which impose criminal and civil penalties and authorize civil whistleblower

or qui tam actions,

against individuals or entities for, among other things:

knowingly presenting, or causing to be presented, to the federal government,

claims for payment that are false or fraudulent;

making, using or causing to be made or used, a false statement or record material to

a false or fraudulent claim or obligation to pay or transmit money or property to the federal government;

or knowingly concealing or

knowingly and improperly avoiding or decreasing an obligation to pay money to the federal government;

the civil monetary penalties law, which prohibits, among other things, the offering or giving of remuneration, which includes, without limitation, any transfer of items or services for free or for less than fair market value (with limited exceptions), to a Medicare or Medicaid beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular supplier of items or services reimbursable by a federal or state governmental program;

HIPAA, which created new federal criminal statutes

that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or

obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under

the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully

falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection

● federal civil and criminal false

claims laws and civil monetary penalties laws, such as the federal False Claims Act, which impose criminal and civil penalties and authorize

civil whistleblower or qui tam actions, against individuals or entities for, among other things:

knowingly presenting, or causing to

be presented, to the federal government, claims for payment that are false or fraudulent;

making, using or causing to be made or used,

a false statement or record material to a false or fraudulent claim or obligation to pay or transmit money or property to the federal

or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay money to the federal government;

● the civil monetary penalties

law, which prohibits, among other things, the offering or giving of remuneration, which includes, without limitation, any transfer of

items or services for free or for less than fair market value (with limited exceptions), to a Medicare or Medicaid beneficiary that the

person knows or should know is likely to influence the beneficiary’s selection of a particular supplier of items or services reimbursable

by a federal or state governmental program;

● HIPAA, which created new federal

criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit

program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or

under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and

willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection

with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters;

similar to the federal

Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it

in order to have committed a violation;

the federal transparency requirements under the Affordable Care Act, or ACA, including the provision commonly referred to as the Physician Payments Sunshine Act, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the U.S.

Department of Health and Human Services information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners (physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered nurse anesthetists and certified nurse midwives) and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members;

federal government price reporting laws, which require

us to calculate and report complex pricing metrics in an accurate and timely manner to government programs;

federal consumer protection and unfair competition

laws, which broadly regulate marketplace activities and activities that potentially harm consumers.

Additionally,

we are subject to state and foreign equivalents of each of the healthcare laws described above, among others, some of which may be broader

in scope and may apply regardless of the payor.

states have adopted laws similar to the federal Anti-Kickback Statute, some

of which apply to the referral of patients for healthcare services reimbursed by any source, not just governmental payors, including

private insurers.

In addition, some states have passed laws that require pharmaceutical companies to comply with the April 2003 Office

of Inspector General Compliance Program Guidance for Pharmaceutical Manufacturers and/or the Pharmaceutical Research and Manufacturers

of America’s Code on Interactions with Healthcare Professionals.

Several states also impose other marketing restrictions or require

pharmaceutical companies to make marketing or price disclosures to the state.

There are ambiguities as to what is required to comply

with these state requirements and if we fail to comply with an applicable state law requirement we could be subject to penalties.

there are state and foreign laws governing the privacy and security of health information, many of which differ from each other in significant

ways and often are not pre-empted by HIPAA, thus complicating compliance efforts.

of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our

business activities could be subject to challenge under one or more of such laws.

of fraud and abuse laws may be punishable by criminal and/or civil sanctions, including penalties, fines, imprisonment and/or exclusion

or suspension from federal and state healthcare programs such as Medicare and Medicaid and debarment from contracting with the U.S.

In addition, private individuals have the ability to bring actions on behalf of the U.S.

government under the federal False Claims Act

as well as under the false claims laws of several states.

enforcement authorities are increasingly focused on enforcing fraud and abuse laws, and it is possible that some of our practices may

be challenged under these laws.

Efforts to ensure that our current and future business arrangements with third parties, and our business

generally, will comply with applicable healthcare laws and regulations will involve substantial costs.

It is possible that governmental

authorities will conclude that our business practices, including our arrangements with physicians and other healthcare providers, some

of whom receive stock options as compensation for services provided, may not comply with current or future statutes, regulations, agency

guidance or case law involving applicable fraud and abuse or other healthcare laws and regulations.

If any such actions are instituted

against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on

our business, including the imposition of civil, criminal and administrative penalties, damages, disgorgement, monetary fines, imprisonment,

possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational

harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate

our business and our results of operations.

In addition, the approval and commercialization of any of our product candidates outside

the United States will also likely subject us to foreign equivalents of the healthcare laws mentioned above, among other foreign laws.

any of the physicians or other healthcare providers or entities with whom we expect to do business are found to be not in compliance

with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded

healthcare programs, which may also adversely affect our business.

like the Anti-Kickback Statute prohibition in the United States, the provision of benefits or advantages to physicians to induce or encourage

the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is also prohibited in the European

The provision of benefits or advantages to physicians is mainly governed by the national anti-bribery laws of the member states,

such as the UK Bribery Act 2010, or national anti-kickback provisions (France, Belgium, etc.).

Infringement of these laws could result

in substantial fines and imprisonment.

In certain member states, payments made to physicians must be publicly disclosed.

Moreover, agreements

with physicians often must be the subject of prior notification and approval by the physician’s employer, his or her competent

professional organization and/or the regulatory authorities of the individual member states.

These requirements are provided in the national

laws, industry codes or professional codes of conduct, applicable in the member states.

Failure to comply with these requirements could

result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.

addition to the foregoing, state and federal laws regarding environmental protection and hazardous substances, including the Occupational

Safety and Health Act, the Resource Conservancy and Recovery Act and the Toxic Substances Control Act, affect our business.

other laws govern our use, handling and disposal of various biological, chemical and radioactive substances used in, and wastes generated

by, our operations.

If our operations result in contamination of the environment or expose individuals to hazardous substances, we could

be liable for damages and governmental fines.

We believe that we are in material compliance with applicable environmental laws and that

continued compliance therewith will not have a material adverse effect on our business.

We cannot predict, however, how changes in these

laws may affect our future operations.

similar to the federal Anti-Kickback

Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed

● the federal transparency requirements

under the Affordable Care Act, or ACA, including the provision commonly referred to as the Physician Payments Sunshine Act, which requires

manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s

Health Insurance Program to report annually to the U.S.

Department of Health and Human Services information related to payments or other

transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician

practitioners (physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered

nurse anesthetists and certified nurse midwives) and teaching hospitals, as well as ownership and investment interests held by the physicians

described above and their immediate family members;

● federal government price reporting

laws, which require us to calculate and report complex pricing metrics in an accurate and timely manner to government programs;

● federal consumer protection

and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers.

Additionally, we are subject to state and foreign

equivalents of each of the healthcare laws described above, among others, some of which may be broader in scope and may apply regardless

of the payor.

states have adopted laws similar to the federal Anti-Kickback Statute, some of which apply to the referral of

patients for healthcare services reimbursed by any source, not just governmental payors, including private insurers.

In addition, some

states have passed laws that require pharmaceutical companies to comply with the April 2003 Office of Inspector General Compliance Program

Guidance for Pharmaceutical Manufacturers and/or the Pharmaceutical Research and Manufacturers of America’s Code on Interactions

with Healthcare Professionals.

Several states also impose other marketing restrictions or require pharmaceutical companies to make marketing

or price disclosures to the state.

There are ambiguities as to what is required to comply with these state requirements and if we fail

to comply with an applicable state law requirement we could be subject to penalties.

Finally, there are state and foreign laws governing

the privacy and security of health information, many of which differ from each other in significant ways and often are not pre-empted

by HIPAA, thus complicating compliance efforts.

Because of the breadth of these laws and the narrowness

of the statutory exceptions and safe harbors available, it is possible that some of our business activities could be subject to challenge

under one or more of such laws.

Violations of fraud and abuse laws may be punishable

by criminal and/or civil sanctions, including penalties, fines, imprisonment and/or exclusion or suspension from federal and state healthcare

programs such as Medicare and Medicaid and debarment from contracting with the U.S.

In addition, private individuals have

the ability to bring actions on behalf of the U.S.

government under the federal False Claims Act as well as under the false claims laws

of several states.

Law enforcement authorities are increasingly focused

on enforcing fraud and abuse laws, and it is possible that some of our practices may be challenged under these laws.

Efforts to ensure

that our current and future business arrangements with third parties, and our business generally, will comply with applicable healthcare

laws and regulations will involve substantial costs.

It is possible that governmental authorities will conclude that our business practices,

including our arrangements with physicians and other healthcare providers, some of whom receive stock options as compensation for services

provided, may not comply with current or future statutes, regulations, agency guidance or case law involving applicable fraud and abuse

or other healthcare laws and regulations.

If any such actions are instituted against us, and we are not successful in defending ourselves

or asserting our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal and

administrative penalties, damages, disgorgement, monetary fines, imprisonment, possible exclusion from participation in Medicare, Medicaid

and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment

of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

the approval and commercialization of any of our product candidates outside the United States will also likely subject us to foreign equivalents

of the healthcare laws mentioned above, among other foreign laws.

If any of the physicians or other healthcare providers

or entities with whom we expect to do business are found to be not in compliance with applicable laws, they may be subject to criminal,

civil or administrative sanctions, including exclusions from government funded healthcare programs, which may also adversely affect our

Much like the Anti-Kickback Statute prohibition

in the United States, the provision of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement,

purchase, supply, order or use of medicinal products is also prohibited in the European Union.

The provision of benefits or advantages

to physicians is mainly governed by the national anti-bribery laws of the member states, such as the UK Bribery Act 2010, or national

anti-kickback provisions (France, Belgium, etc.).

Infringement of these laws could result in substantial fines and imprisonment.

member states, payments made to physicians must be publicly disclosed.

Moreover, agreements with physicians often must be the subject

of prior notification and approval by the physician’s employer, his or her competent professional organization and/or the regulatory

authorities of the individual member states.

These requirements are provided in the national laws, industry codes or professional codes

of conduct, applicable in the member states.

Failure to comply with these requirements could result in reputational risk, public reprimands,

administrative penalties, fines or imprisonment.

Additional Regulation

In addition to the foregoing, state and federal

laws regarding environmental protection and hazardous substances, including the Occupational Safety and Health Act, the Resource Conservancy

and Recovery Act and the Toxic Substances Control Act, affect our business.

These and other laws govern our use, handling and disposal

of various biological, chemical and radioactive substances used in, and wastes generated by, our operations.

If our operations result

in contamination of the environment or expose individuals to hazardous substances, we could be liable for damages and governmental fines.

We believe that we are in material compliance with applicable environmental laws and that continued compliance therewith will not have

a material adverse effect on our business.

We cannot predict, however, how changes in these laws may affect our future operations.

Foreign Corrupt Practices Act

Foreign Corrupt Practices Act, to which we are subject, prohibits corporations and individuals from engaging in certain activities

to obtain or retain business or to influence a person working in an official capacity.

It is illegal to pay, offer to pay or authorize

the payment of anything of value to any foreign government official, government staff member, political party or political candidate

in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity.

Similar rules apply to

many other countries worldwide such as France (“ Loi Sapin” ) or the United Kingdom (UK Bribery Act).

Foreign Corrupt Practices Act, to which

we are subject, prohibits corporations and individuals from engaging in certain activities to obtain or retain business or to influence

a person working in an official capacity.

It is illegal to pay, offer to pay or authorize the payment of anything of value to any foreign

government official, government staff member, political party or political candidate in an attempt to obtain or retain business or to

otherwise influence a person working in an official capacity.

Similar rules apply to many other countries worldwide such as France (“ Loi

Sapin” ) or the United Kingdom (UK Bribery Act).

Healthcare Reform

18 unchanged sentences

Innovation at the CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending.

its enactment, there have been a number of significant changes to the ACA.

Since its enactment, there have been a number of significant

changes to the ACA.

On June 17, 2021, the U.S.

Supreme Court dismissed

the most recent judicial challenge to the ACA without specifically ruling on the constitutionality of the ACA.

Prior to the Supreme

Court’s decision, President Biden issued an executive order initiating a special enrollment period from February 15, 2021

through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace.

The executive order

also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to

More recently, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which

eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer

price, beginning January 1, 2024.

In addition, the Budget Control Act of 2011 and

the Bipartisan Budget Act of 2015 led to aggregate reductions of Medicare payments to providers of 2% per fiscal year that will remain

in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022 and a 1% reduction from April

Supreme Court dismissed the most recent judicial challenge to the ACA without specifically

ruling on the constitutionality of the ACA.

Prior to the Supreme Court’s decision, President Biden issued an executive order initiating

a special enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage

through the ACA marketplace.

The executive order also instructed certain governmental agencies to review and reconsider their existing

policies and rules that limit access to healthcare.

More recently, on March 11, 2021, President Biden signed the American Rescue

Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average

manufacturer price, beginning January 1, 2024.

In addition, the Budget Control Act of 2011 and the

Bipartisan Budget Act of 2015 led to aggregate reductions of Medicare payments to providers of 2% per fiscal year that will remain in

effect through 2030, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022 and a 1% reduction from April

1, 2022 through June 30, 2022, unless additional Congressional action is taken.

7 unchanged sentences

government program reimbursement methodologies for pharmaceutical products.

Individual states in the United States have also become increasingly

active in passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient

reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures,

and, in some cases, designed to encourage importation from other countries and bulk purchasing.

expect that additional foreign, federal and state healthcare reform measures will be adopted in the future, any of which could limit

the amounts that federal and state governments will pay for healthcare products and services, which could result in limited coverage

and reimbursement and reduced demand for our products, once approved, or additional pricing pressures.

and Reimbursement

uncertainty exists as to the coverage and reimbursement status of any products for which we obtain regulatory approval.

In the United

Sates, cosmetics are not generally eligible for coverage and reimbursement and thus any products that are marketed as cosmetics will

not be covered or reimbursed.

In the United States and markets in other countries, sales of any products for which we receive regulatory

approval for commercial sale will depend, in part, on the availability of coverage and reimbursement from third-party payors.

payors include government authorities, managed care providers, private health insurers and other organizations.

The process for determining

whether a payor will provide coverage for a product may be separate from the process for setting the reimbursement rate that the payor

will pay for the product.

Third-party payors may limit coverage to specific products on an approved list, or formulary, which might not

include all of the FDA-approved products for a particular indication.

A decision by a third-party payor not to cover our products could

reduce physician utilization of our products once approved and have a material adverse effect on our sales, results of operations and

financial condition.

Moreover, a payor’s decision to provide coverage for a product does not imply that an adequate reimbursement

rate will be approved.

Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize

an appropriate return on our investment in product development.

addition, coverage and reimbursement for products can differ significantly from payor to payor.

One third-party payor’s decision

to cover a particular medical product or service does not ensure that other payors will also provide coverage for the medical product

or service, or will provide coverage at an adequate reimbursement rate.

a result, the coverage determination process will require us to provide scientific and clinical support for the use of our products to

each payor separately and will be a time-consuming process.

payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services,

in addition to their safety and efficacy.

In order to obtain and maintain coverage and reimbursement for any product, we may need to

conduct expensive clinical trials in order to demonstrate the medical necessity and cost-effectiveness of such product, in addition to

the costs required to obtain regulatory approvals.

If third-party payors do not consider a product to be cost-effective compared to other

available therapies, they may not cover the product as a benefit under their plans or, if they do, the level of payment may not be sufficient

to allow a company to sell its products at a profit.

of the United States, the pricing of pharmaceutical products is subject to governmental control in many countries.

For example, in the

European Union, pricing and reimbursement schemes vary widely from member state to member state.

Some countries provide that products

may be marketed only after a reimbursement price has been agreed.

Some countries may require the completion of additional studies that

compare the cost-effectiveness of a particular therapy to currently available therapies or so-called health technology assessments, in

order to obtain reimbursement or pricing approval.

Other countries may allow companies to fix their own prices for products, but monitor

and control product volumes and issue guidance to physicians to limit prescriptions.

Efforts to control prices and utilization of pharmaceutical

products and medical devices will likely continue as countries attempt to manage healthcare expenditures.

Privacy and Security Laws

state, federal and foreign laws, including consumer protection laws and regulations, govern the collection, dissemination, use, access

to, confidentiality and security of personal information, including health-related information.

In the United States, numerous federal

and state laws and regulations, including data breach notification laws, health information privacy and security laws, including Health

Insurance Portability and Accountability Act of 1996, or HIPAA, and federal and state consumer protection laws and regulations (e.g.,

Section 5 of the FTC Act), that govern the collection, use, disclosure, and protection of health-related and other personal information

could apply to our operations or the operations of our partners.

In August 2022, the Inflation Reduction Act authorized Medicare

to negotiate drug prices for certain high expenditure, single source Medicare part B or D drugs.

Individual states in the United States

have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical product pricing,

including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure

and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

We expect that additional foreign, federal and

state healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments

will pay for healthcare products and services, which could result in limited coverage and reimbursement and reduced demand for our products,

once approved, or additional pricing pressures.

Coverage and Reimbursement

Significant uncertainty exists as to the coverage

and reimbursement status of any products for which we obtain regulatory approval.

In the United States, cosmetics are not generally eligible

for coverage and reimbursement and thus any products that are marketed as cosmetics will not be covered or reimbursed.

In the United States

and markets in other countries, sales of any products for which we receive regulatory approval for commercial sale will depend, in part,

on the availability of coverage and reimbursement from third-party payors.

Third-party payors include government authorities, managed

care providers, private health insurers and other organizations.

The process for determining whether a payor will provide coverage for

a product may be separate from the process for setting the reimbursement rate that the payor will pay for the product.

Third-party payors

may limit coverage to specific products on an approved list, or formulary, which might not include all of the FDA-approved products for

a particular indication.

A decision by a third-party payor not to cover our products could reduce physician utilization of our products

once approved and have a material adverse effect on our sales, results of operations and financial condition.

Moreover, a payor’s

decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved.

Adequate third-party reimbursement

may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development.

In addition, coverage and reimbursement for products

can differ significantly from payor to payor.

One third-party payor’s decision to cover a particular medical product or service

does not ensure that other payors will also provide coverage for the medical product or service, or will provide coverage at an adequate

reimbursement rate.

As a result, the coverage determination process

will require us to provide scientific and clinical support for the use of our products to each payor separately and will be a time-consuming

Third-party payors are increasingly challenging

the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and

In order to obtain and maintain coverage and reimbursement for any product, we may need to conduct expensive clinical trials

in order to demonstrate the medical necessity and cost-effectiveness of such product, in addition to the costs required to obtain regulatory

If third-party payors do not consider a product to be cost-effective compared to other available therapies, they may not cover

the product as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow a company to sell its products

Outside of the United States, the pricing of pharmaceutical

products is subject to governmental control in many countries.

For example, in the European Union, pricing and reimbursement schemes vary

widely from member state to member state.

Some countries provide that products may be marketed only after a reimbursement price has been

Some countries may require the completion of additional studies that compare the cost-effectiveness of a particular therapy to

currently available therapies or so-called health technology assessments, in order to obtain reimbursement or pricing approval.

countries may allow companies to fix their own prices for products, but monitor and control product volumes and issue guidance to physicians

to limit prescriptions.

Efforts to control prices and utilization of pharmaceutical products and medical devices will likely continue

as countries attempt to manage healthcare expenditures.

Data Privacy and Security Laws

Numerous state, federal and foreign laws, including

consumer protection laws and regulations, govern the collection, dissemination, use, access to, confidentiality and security of personal

information, including health-related information.

In the United States, numerous federal and state laws and regulations, including data

breach notification laws, health information privacy and security laws, including Health Insurance Portability and Accountability Act

of 1996, or HIPAA, and federal and state consumer protection laws and regulations (e.g., Section 5 of the FTC Act), that govern the collection,

use, disclosure, and protection of health-related and other personal information could apply to our operations or the operations of our

In addition, certain state and non-U.S.

laws, such as the California

Consumer Protection Act, the California Privacy Rights Act, and the General Data Protection Regulation, or GDPR, govern the privacy and

security of personal information, including health-related information in certain circumstances, some of which are more stringent than

HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and

private litigation.

Privacy and security laws, regulations, and other obligations are constantly evolving, may conflict with each other

to complicate compliance efforts, and can result in investigations, proceedings, or actions that lead to significant civil and/or criminal

penalties and restrictions on data processing.

Agreement with Yeda

June 22, 2015, BiomX Ltd.

entered into the Research and License Agreement, with Yeda, or, as amended, the Yeda 2015 License Agreement,

the technology transfer office of the WIS, pursuant to which BiomX Ltd.

received an exclusive worldwide license to certain know-how and

research information related to the development, testing, manufacturing, production and sale of microbiome-based therapeutic product

candidates, including candidates specified in the agreement, which are used in our phage discovery platform, as well as patents, research

and other rights to phage product candidates resulting from the work of the consultants identified in the agreement and further research

conducted at the WIS which BiomX Ltd.

connection with this license, we are to pay a non-refundable license fee of $10,000 per year.

laws, such as the California Consumer Protection Act, the California Privacy Rights

Act, and the General Data Protection Regulation, or GDPR, govern the privacy and security of personal information, including health-related

information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant

ways and may not have the same effect, thus complicating compliance efforts.

Failure to comply with these laws, where applicable, can

result in the imposition of significant civil and/or criminal penalties and private litigation.

Privacy and security laws, regulations,

and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can result in investigations,

proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.

Material Agreements

License Agreements

License Agreement with Yeda

On June 22, 2015, BiomX Ltd.

entered into the Research

and License Agreement, with Yeda, or, as amended, the Yeda 2015 License Agreement, the technology transfer office of the WIS, pursuant

to which BiomX Ltd.

received an exclusive worldwide license to certain know-how and research information related to the development, testing,

manufacturing, production and sale of microbiome-based therapeutic product candidates, including candidates specified in the agreement,

which are used in our phage discovery platform, as well as patents, research and other rights to phage product candidates resulting from

the work of the consultants identified in the agreement and further research conducted at the WIS which BiomX Ltd.

In connection with this license, we are to pay a non-refundable

license fee of $10,000 per year.

In addition, BiomX Ltd.

contributed an

aggregate of approximately $2.0 million to the research budget agreed upon in the Yeda 2015 License Agreement.

We are also required to

pay tiered royalties in the low single digits on net sales of products and diagnostic kits covered by the Yeda 2015 License Agreement,

subject to reductions as described therein.

The products and diagnostic kits covered by the license agreement include those directed

to IBD, CRC, and any other indications that may be treated by phage-based therapies, as well as related technology platforms.

If we sublicense

our rights under this agreement we will be obligated to pay Yeda additional sublicense royalties expressed as a percentage of the sublicensing

receipts described in the agreement received ranging from the mid-teens to the mid-twenties.

We are obligated to pay filing and maintenance

expenses in respect of patents licensed under the Yeda 2015 License Agreement.

In connection with the Yeda 2015 License Agreement, BiomX

also issued certain ordinary shares which were subsequently converted to 193,406 shares of our Common Stock as part of the Business

Combination (as defined below).

In the event of certain mergers and acquisitions we are party to, we are obligated to pay Yeda an amount

equivalent to 1% of the consideration received under such transaction.

terminated earlier by either party, the license granted will remain in effect in each country and for each product developed based on

the license until the later of the expiration of the last licensed patent (which is expected to be in 2039) in such country for such

product, and eleven years from the date of first commercial sale of such product in such country for such product.

The Yeda 2015 License

Agreement terminates upon the later of the expiration of the last of the patents covered under the agreement, and the expiry of a continuous

15-year period during which there has not been a first commercial sale of any product in any country.

Yeda may also terminate the agreement

if we fail to observe certain diligence and development requirements and milestones as described in the agreement.

We or Yeda may terminate

the agreement for the material uncured breach of the other party after a notice period, or the other party’s winding up, bankruptcy,

insolvency, dissolution or other similar discontinuation of business.

Upon termination of the agreement, other than due to the passage

of time, we are required to grant to Yeda a non-exclusive, irrevocable, perpetual, fully paid-up, sublicensable, worldwide license in

respect of our rights in know-how and research results as described in the Yeda 2015 License Agreement, provided that if Yeda subsequently

grants a license to a third party that utilizes our rights, we are entitled to share in the net proceeds actually received by Yeda arising

out of that license, subject to a cap based on the development expenses that we incur in connection with the Yeda 2015 License Agreement.

consult with Yeda with respect to patent prosecution and maintenance decisions.

Yeda is primarily responsible for prosecution and maintenance

with respect to Licensed Information (as defined in the license) and we are responsible for prosecution and maintenance with respect

to Subsequent Results (as defined in the license).

We and Yeda are both entitled to consultation rights.

We are responsible for costs

associated with prosecution and maintenance of all patents and applications.

are entitled to enforce the patent rights under the license upon approval by Yeda.

Yeda may elect to join the lawsuit, but we are responsible

for all litigation-related expenses.

Yeda reserves the right to bring its own actions if we do not notify Yeda of our intent to enforce

a right or bring an action after we initially notified Yeda of the potential action.

Patent License Agreement with Keio and JSR Corporation, or JSR, for IBD

entered into an Exclusive Patent License Agreement with Keio, and JSR on December 15, 2017, as amended, pursuant to which BiomX

was granted an exclusive, royalty-bearing, worldwide, perpetual sublicense by JSR to certain patent rights related to our IBD program.

Specifically, these patent rights relate to bacterial targets that have been observed to be related to IBD and the phage that were observed

to eradicate these bacterial targets.

paid JSR a license issue fee of $10,000 and have agreed to pay annual fees ranging from $15,000 to $25,000 in each subsequent year.

addition to the license fees, we have agreed to make payments upon the satisfaction of certain clinical and regulatory milestones up

to an aggregate of $3.2 million, of which $40,000 was paid in February 2021.

We are also required to pay tiered royalties expressed as

a percentage of annual net sales of products developed under the agreement in the low single digits.

If we sublicense our rights under

this agreement, we will be obligated to pay sublicense royalties expressed as a percentage of sublicense income received, including any

license signing fee, license maintenance fee, distribution or joint marketing fee and milestone payments, ranging in the high single

digits to the low teens.

Our payments under this agreement are subject to reductions as set forth therein.

earlier terminated, this agreement will expire on the later of the date on which all issued patents and filed patent applications have

expired (which is expected to be in 2039), or been abandoned, withdrawn, rejected, revoked or invalidated, and five years from the date

of first commercial sale of a product developed under the agreement in any country or, if later, when the product ceases to be covered

by a valid claim in the United States, European Union or Japan.

JSR may terminate this agreement if we fail to pay the amounts due under

this agreement, or upon our winding up, bankruptcy, insolvency, dissolution or other similar discontinuation of business, or if we breach

the material terms of this agreement and such breach is uncured.

We may terminate this agreement at any time upon three months’

advance written notice to JSR.

Keio and JSR are responsible for maintenance and prosecution of patents that are to be jointly owned by the parties.

JSR is entitled

to the opportunity to advise and approve decisions that would have a material adverse impact on the scope of the claims.

JSR is responsible

for patents that are listed in such agreement and we are entitled to advise with respect to patent counsel, scope of claims, and other

We are entitled to bring enforcement actions (in our name alone and at our own expense).

We are required to obtain JSR’s

prior written consent for each action we bring with respect to the Patent Rights only.

Patent License Agreement with Keio and JSR for PSC

entered into an additional Exclusive Patent License Agreement with Keio and JSR on April 22, 2019, pursuant to which we were granted

an exclusive, royalty-bearing, worldwide, perpetual sublicense by JSR to certain patent rights related to our PSC program.

Specifically,

these patent rights relate to bacterial targets that have been observed to be related to PSC and the phage that were observed to eradicate

these bacterial targets.

paid JSR a license issue fee of $20,000 and have agreed to pay annual fees ranging from $15,000 to $25,000 in each subsequent year.

addition to the license fees, we have agreed to make payments upon the satisfaction of certain clinical and regulatory milestones up

to an aggregate amount of $3.2 million.

We are also required to pay tiered royalties expressed as a percentage of annual net sales of

products developed under the agreement in the low single digits.

contributed an aggregate of approximately $2.0 million to the research budget

agreed upon in the Yeda 2015 License Agreement.

We are also required to pay tiered royalties in the low single digits on net sales of

products and diagnostic kits covered by the Yeda 2015 License Agreement, subject to reductions as described therein.

The products and

diagnostic kits covered by the license agreement include those directed to IBD, CRC, and any other indications that may be treated by

phage-based therapies, as well as related technology platforms.

If we sublicense our rights under this agreement we will be obligated

to pay sublicense royalties expressed as a percentage of sublicense income received, including any license signing fee, license maintenance

fee, distribution or joint marketing fee and milestone payments, ranging in the high single digits to the low teens.

Our payments under

this agreement are subject to reductions as set forth therein.

earlier terminated, this agreement will expire on the later of the date on which all issued patents and filed patent applications have

expired (which is expected to be in 2039), or been abandoned, withdrawn, rejected, revoked or invalidated, and five years from the date

of first commercial sale of a product developed in connection with this agreement in any country or, if later, when the product ceases

to be covered by a valid claim in the United States, European Union or Japan.

JSR may terminate this agreement if we fail to pay the

amounts due under this agreement, or upon our winding up, bankruptcy, insolvency, dissolution or other similar discontinuation of business,

or if we breach the material terms of this agreement and such breach is uncured.

We may terminate this agreement at any time upon three

months’ advance written notice to JSR.

Keio and JSR are responsible for maintenance and prosecution of patents that are to be jointly owned by the parties.

JSR is entitled

to the opportunity to advise and approve decisions that would have a material adverse impact on the scope of the claims.

JSR is responsible

for patents that fall under Patent Rights and we are entitled to advise with respect to patent counsel, scope of claims, and other matters.

We are entitled to bring enforcement actions (in our name alone and at our own expense).

of December 31, 2021, we had 103 full-time employees and consultants and 16 part time employees.

Thirty-three of our employees

degrees and 99 of our employees are currently engaged in research and preclinical development activities.

of our employees is represented by labor unions or covered by collective bargaining agreements.

We consider our relationship with our

employees to be very strong.

response to the COVID-19 pandemic, we implemented significant changes designed to ensure the safety and well-being of our employees as

well as the communities in which we operate.

We have not laid off any employees due to the pandemic.

We implemented additional safety

measures including masks and social distancing protocols in our offices and encouraged remote working arrangements for employees.

date, our remote working arrangements have not significantly affected our ability to maintain critical business operations.

is an Israeli company formed in March 2015 under the name “MBcure Ltd.”, as an incubator company as part of the FutuRx

In May 2017, the Company changed its name from MBcure Ltd.

to BiomX Ltd.

was incorporated as a blank check company on November 1, 2017, under the laws of the State of Delaware, under the name “Chardan

Healthcare Acquisition Corporation Inc.”, for the purpose of entering into a merger, stock exchange, asset acquisition, stock purchase,

recapitalization, reorganization or similar business combination with one or more businesses or entities, which was referred to as a

“target business.” Efforts to identify a prospective target business were not limited to any particular industry or geographic

December 18, 2018, we consummated our initial public offering or IPO of 7,000,000 units or Public Units.

The Public Units sold in the

IPO were sold at an offering price of $10.00 per Public Unit, generating total gross proceeds of $70,000,000.

The Public Units each consist

of one share of Common Stock or the Public Share and one warrant to purchase one-half of a share of Common Stock or the Public Warrant,

with every two Public Warrants entitling the holder to purchase one share of Common Stock for $11.50 per full share.

with the consummation of the IPO, we consummated the private placement of an aggregate of 2,900,000 warrants or the Private Placement

Warrants, each exercisable to purchase one share of Common Stock for $11.50 per share, to an affiliate of the Sponsor, at a price of

$0.40 per Private Placement Warrant, generating total proceeds of $1,160,000.

October 28, 2019, we and BiomX Ltd.

consummated a business combination pursuant to a merger agreement dated as of July 16, 2019 and amended

as of October 11, 2019, or the Merger Agreement, by and among the Company, BiomX Ltd., CHAC Merger Sub Ltd., an Israeli company and wholly

owned subsidiary of the Company or the Merger Sub, and Shareholder Representative Services LLC, solely in its capacity as the shareholders’

representative thereunder.

Pursuant to the Merger Agreement, among other things, Merger Sub merged with and into BiomX Ltd., with BiomX

continuing as the surviving entity and a wholly owned subsidiary of the Company or the Business Combination.

In connection with

the Business Combination, the Company changed its name to BiomX Inc.

of the October 28, 2019, all of the issued and outstanding shares and other equity interests in and of BiomX Ltd.

immediately prior to

the consummation of the Business Combination were canceled, and, in consideration therefor, the Company issued (or reserved for issuance)

16,625,000 shares of Common Stock or vested options or warrants to purchase Common Stock to BiomX Ltd.

vested security holders.

addition, we also agreed to issue the following number of additional shares of Common Stock, in the aggregate, to the BiomX Ltd.

on a pro rata basis, subject to the Company’s achievement of the conditions specified below following October 28, 2019:

2,000,000 additional shares of the Company’s Common Stock if the daily volume weighted average price of the Company’s Common Stock in any 20 trading days within a 30-trading day period prior to January 1, 2022 is greater than or equal to $16.50 per share.

This condition was not achieved and no shares were issued.

2,000,000 additional shares of the Company’s

Common Stock if the daily volume weighted average price of the Company’s Common Stock in any 20 trading days within a

30-trading day period prior to January 1, 2024 is greater than or equal to $22.75 per share.

2,000,000 additional shares of the Company’s

Common Stock if the daily volume weighted average price of the Company’s Common Stock in any 20 trading days within a

30-trading day period prior to January 1, 2026 is greater than or equal to $29.00 per share.

mailing address of our principal executive office is 22 Einstein St., Floor 5, Ness Ziona, Israel 7414003 and the telephone number is

(972) 72-394-2377.

Our corporate website address is www.biomx.com.

The content of our website is not intended to be incorporated by reference

into this report or in any other report or document we file and any references to these websites are intended to be inactive textual

references only.

About Our Executive Officers

following table sets forth information regarding our executive officers as of the date of this Annual Report:

to pay Yeda additional sublicense royalties expressed as a percentage of the sublicensing receipts described in the agreement received

ranging from the mid-teens to the mid-twenties.

We are obligated to pay filing and maintenance expenses in respect of patents licensed

under the Yeda 2015 License Agreement.

In connection with the Yeda 2015 License Agreement, BiomX Ltd.

also issued certain ordinary shares

which were subsequently converted to 193,406 shares of our Common Stock as part of the Business Combination (as defined below).

event of certain mergers and acquisitions we are party to, we are obligated to pay Yeda an amount equivalent to 1% of the consideration

received under such transaction.

Unless terminated earlier by either party, the

license granted will remain in effect in each country and for each product developed based on the license until the later of the expiration

of the last licensed patent (which is expected to be in 2039) in such country for such product, and eleven years from the date of first

commercial sale of such product in such country for such product.

The Yeda 2015 License Agreement terminates upon the later of the expiration

of the last of the patents covered under the agreement, and the expiry of a continuous 15-year period during which there has not been

a first commercial sale of any product in any country.

Yeda may also terminate the agreement if we fail to observe certain diligence and

development requirements and milestones as described in the agreement.

We or Yeda may terminate the agreement for the material uncured

breach of the other party after a notice period, or the other party’s winding up, bankruptcy, insolvency, dissolution or other similar

discontinuation of business.

Upon termination of the agreement, other than due to the passage of time, we are required to grant to Yeda

a non-exclusive, irrevocable, perpetual, fully paid-up, sublicensable, worldwide license in respect of our rights in know-how and research

results as described in the Yeda 2015 License Agreement, provided that if Yeda subsequently grants a license to a third party that utilizes

our rights, we are entitled to share in the net proceeds actually received by Yeda arising out of that license, subject to a cap based

on the development expenses that we incur in connection with the Yeda 2015 License Agreement.

We consult with Yeda with respect to patent prosecution

and maintenance decisions.

Yeda is primarily responsible for prosecution and maintenance with respect to Licensed Information (as defined

in the license) and we are responsible for prosecution and maintenance with respect to Subsequent Results (as defined in the license).

We and Yeda are both entitled to consultation rights.

We are responsible for costs associated with prosecution and maintenance of all

patents and applications.

We are entitled to enforce the patent rights under

the license upon approval by Yeda.

Yeda may elect to join the lawsuit, but we are responsible for all litigation-related expenses.

reserves the right to bring its own actions if we do not notify Yeda of our intent to enforce a right or bring an action after we initially

notified Yeda of the potential action.

Exclusive Patent License Agreement with Keio

and JSR Corporation, or JSR, for IBD

entered into an Exclusive Patent License

Agreement with Keio, and JSR on December 15, 2017, as amended, pursuant to which BiomX Ltd.

was granted an exclusive, royalty-bearing,

worldwide, perpetual sublicense by JSR to certain patent rights related to our IBD program.

Specifically, these patent rights relate to

bacterial targets that have been observed to be related to IBD and the phage that were observed to eradicate these bacterial targets.

We paid JSR a license issue fee of $10,000 and

have agreed to pay annual fees ranging from $15,000 to $25,000 in each subsequent year.

In addition to the license fees, we have agreed

to make payments upon the satisfaction of certain clinical and regulatory milestones up to an aggregate of $3.2 million, of which $40,000

was paid in February 2021.

We are also required to pay tiered royalties expressed as a percentage of annual net sales of products developed

under the agreement in the low single digits.

If we sublicense our rights under this agreement, we will be obligated to pay sublicense

royalties expressed as a percentage of sublicense income received, including any license signing fee, license maintenance fee, distribution

or joint marketing fee and milestone payments, ranging in the high single digits to the low teens.

Our payments under this agreement are

subject to reductions as set forth therein.

Unless earlier terminated, this agreement will

expire on the later of the date on which all issued patents and filed patent applications have expired (which is expected to be in 2039),

or been abandoned, withdrawn, rejected, revoked or invalidated, and five years from the date of first commercial sale of a product developed

under the agreement in any country or, if later, when the product ceases to be covered by a valid claim in the United States, European

Union or Japan.

JSR may terminate this agreement if we fail to pay the amounts due under this agreement, or upon our winding up, bankruptcy,

insolvency, dissolution or other similar discontinuation of business, or if we breach the material terms of this agreement and such breach

We may terminate this agreement at any time upon three months’ advance written notice to JSR.

We, Keio and JSR are responsible for maintenance

and prosecution of patents that are to be jointly owned by the parties.

JSR is entitled to the opportunity to advise and approve decisions

that would have a material adverse impact on the scope of the claims.

JSR is responsible for patents that are listed in such agreement

and we are entitled to advise with respect to patent counsel, scope of claims, and other matters.

We are entitled to bring enforcement

actions (in our name alone and at our own expense).

We are required to obtain JSR’s prior written consent for each action we bring

with respect to the Patent Rights only.

Exclusive Patent License Agreement with Keio

and JSR for PSC

We entered into an additional Exclusive Patent

License Agreement with Keio and JSR on April 22, 2019, pursuant to which we were granted an exclusive, royalty-bearing, worldwide, perpetual

sublicense by JSR to certain patent rights related to our PSC program.

Specifically, these patent rights relate to bacterial targets that

have been observed to be related to PSC and the phage that were observed to eradicate these bacterial targets.

We paid JSR a license issue fee of $20,000 and

have agreed to pay annual fees ranging from $15,000 to $25,000 in each subsequent year.

In addition to the license fees, we have agreed

to make payments upon the satisfaction of certain clinical and regulatory milestones up to an aggregate amount of $3.2 million.

also required to pay tiered royalties expressed as a percentage of annual net sales of products developed under the agreement in the

low single digits.

If we sublicense our rights under this agreement, we will be obligated to pay sublicense royalties expressed as a

percentage of sublicense income received, including any license signing fee, license maintenance fee, distribution or joint marketing

fee and milestone payments, ranging in the high single digits to the low teens.

Our payments under this agreement are subject to reductions

as set forth therein.

Unless earlier terminated, this agreement will

expire on the later of the date on which all issued patents and filed patent applications have expired (which is expected to be in 2039),

or been abandoned, withdrawn, rejected, revoked or invalidated, and five years from the date of first commercial sale of a product developed

in connection with this agreement in any country or, if later, when the product ceases to be covered by a valid claim in the United States,

European Union or Japan.

JSR may terminate this agreement if we fail to pay the amounts due under this agreement, or upon our winding

up, bankruptcy, insolvency, dissolution or other similar discontinuation of business, or if we breach the material terms of this agreement

and such breach is uncured.

We may terminate this agreement at any time upon three months’ advance written notice to JSR.

We, Keio and JSR are responsible for maintenance

and prosecution of patents that are to be jointly owned by the parties.

JSR is entitled to the opportunity to advise and approve decisions

that would have a material adverse impact on the scope of the claims.

JSR is responsible for patents that fall under Patent Rights and

we are entitled to advise with respect to patent counsel, scope of claims, and other matters.

We are entitled to bring enforcement actions

(in our name alone and at our own expense).

As of December 31, 2022, we had 54 full-time

employees and 11 part time employees.

Sixteen of our employees have Ph.D.

degrees and 50 of our employees are currently engaged

in research and development and clinical activities.

None of our employees is represented by labor unions or covered by collective bargaining

We consider our relationship with our employees to be very strong.

In May 2022, we announced, as part of our corporate restructuring plan,

our intention to reduce our operating costs, including a 50% reduction in personnel, while prioritizing our ongoing CF program.

In response to the COVID-19 pandemic, we implemented

significant changes designed to ensure the safety and well-being of our employees as well as the communities in which we operate.

not laid off any employees due to the pandemic.

We implemented additional safety measures including masks and social distancing protocols

in our offices and encouraged remote working arrangements for employees.

To date, our remote working arrangements have not significantly

affected our ability to maintain critical business operations.

Corporate Information

The mailing address of our principal executive

office is 22 Einstein St., Floor 4, Ness Ziona, Israel 7414003 and the telephone number is (972) 72-394-2377.

Our corporate website address

is www.biomx.com.

The content of our website is not intended to be incorporated by reference into this report or in any other report or

document we file and any references to these websites are intended to be inactive textual references only.

Information About Our Executive Officers

The following table sets forth information regarding

our executive officers as of the date of this Annual Report:

Jonathan Solomon

3 unchanged sentences

Marina Wolfson

Senior Vice President of Finance and Operations

Solomon has served as the Chief Executive Officer and as a director of the Company since October 2019.

Solomon served as

Board member of BiomX Ltd.

from February 2016 and also as Chief Executive Officer from February 2017 to October 2019.

From July 2007

to December 2015, Mr.

Solomon was a co-founder, President, and Chief Executive Officer of ProClara Biosciences Inc.

(formerly NeuroPhage

Pharmaceuticals Inc.), a biotechnology company pioneering an approach to treating neurodegenerative diseases.

Prior to joining ProClara,

he served for ten years in a classified military unit of the Israeli Defense Forces.

Chief Financial Officer

Jonathan Solomon has served as the

Chief Executive Officer and as a director of the Company since October 2019.

Solomon served as Board member of BiomX Ltd.

from February

2016 and also as Chief Executive Officer from February 2017 to October 2019.

From July 2007 to December 2015, Mr.

Solomon was a co-founder,

President, and Chief Executive Officer of ProClara Biosciences Inc.

(formerly NeuroPhage Pharmaceuticals Inc.), a biotechnology company

pioneering an approach to treating neurodegenerative diseases.

Prior to joining ProClara, he served for ten years in a classified military

unit of the Israeli Defense Forces.

Solomon holds B.Sc.

magna cum laude in Physics

and Mathematics from the Hebrew University, an M.Sc.

summa cum laude in Electrical Engineering from Tel Aviv University, and an MBA with

honors from the Harvard Business School.

Oron has served as the Chief Business Officer of the Company since October 2019.

Oron served as Chief Business Officer of

magna cum laude in Physics and Mathematics from the Hebrew University, an

summa cum laude in Electrical Engineering from Tel Aviv University, and an MBA with honors from the Harvard Business School.

Assaf Oron has served as the Chief

Business Officer of the Company since October 2019.

Oron served as Chief Business Officer of BiomX Ltd.

from January 2017 to October

Prior to this position, he served in various roles at Evogene Ltd.

(Nasdaq:EVGN), an agriculture

biotechnology company, which utilizes a proprietary integrated technology infrastructure to enhance seed traits underlying crop productivity,

from March 2006 to December 2016, including Executive Vice President of Strategy and Business Development and Executive Vice President

of Corporate Development.

Prior to joining Evogene, Mr.

Oron served as Chief Executive Officer of ChondroSite Ltd., a biotechnology company

that develops engineered tissue products in the field of orthopedics and as a senior project manager and strategic consultant at Israeli

management consulting company POC Ltd.

(Nasdaq:EVGN), an agriculture biotechnology company, which utilizes

a proprietary integrated technology infrastructure to enhance seed traits underlying crop productivity, from March 2006 to December 2016,

including Executive Vice President of Strategy and Business Development and Executive Vice President of Corporate Development.

joining Evogene, Mr.

Oron served as Chief Executive Officer of ChondroSite Ltd., a biotechnology company that develops engineered tissue

products in the field of orthopedics and as a senior project manager and strategic consultant at Israeli management consulting company

Oron holds an M.Sc.

in Biology (bioinformatics) and a B.Sc.

in Chemistry and Economics, both

from Tel Aviv University.

Merav Bassan has served as the Chief Development Officer of the Company since October 2019.

Prior to this position, she served

in various development roles at Teva Pharmaceutical Industries Limited between 2005 and 2019, including Vice President, Head of Translational

Sciences, Specialty Clinical Development R&D from 2017 to 2019, Vice President, Pain and Global Internal Medicine, Project Leadership,

Innovative Product Development, Global IR&D from 2015 to 2017, and Project Champion, Senior Director, Innovative Product Development,

Global IR&D from 2009 to 2015.

Bassan holds a B.Sc.

in Chemistry and Economics, both from Tel Aviv University.

Merav Bassan has served as the

Chief Development Officer of the Company since October 2019.

Prior to this position, she served in various development roles at Teva Pharmaceutical

Industries Limited between 2005 and 2019, including Vice President, Head of Translational Sciences, Specialty Clinical Development R&D

from 2017 to 2019, Vice President, Pain and Global Internal Medicine, Project Leadership, Innovative Product Development, Global IR&D

from 2015 to 2017, and Project Champion, Senior Director, Innovative Product Development, Global IR&D from 2009 to 2015.

holds a B.Sc.

in Biology, a M.Sc.

in Human Genetics and a Ph.D.

in Neurobiology from Tel

Aviv University, and she completed a Post-Doctoral Fellowship in Neuroscience at Harvard Medical School at Harvard University.

Wolfson has served as the Senior Vice President of Finance and Operations of the Company since October 2020.

Wolfson served

as the Vice President of Finance and Operations of the Company from December 2019 to October 2020.

Wolfson’s experience includes

working with large pharmaceutical and hi-tech companies, as well as venture capital funds.

in Neurobiology from Tel Aviv University, and she completed a Post-Doctoral

Fellowship in Neuroscience at Harvard Medical School at Harvard University.

Marina Wolfson has served as the Chief

Financial Officer of the Company since April 2022.

Wolfson served in several finance and operations roles in the Company from December

2019 to March 2022.

Wolfson’s experience includes working with large pharmaceutical and hi-tech companies, as well as venture

capital funds.

Prior to joining the Company, Ms.

worked as Vice President of Finance at BioView Ltd.

(TASE:BIOV) from 2010 to 2019 and a senior auditor at Ernst & Young, from

2007 to 2010.

Wolfson is a certified public accountant in Israel and holds a B.A in Economics and Accounting (with honors) and an

MBA (with honors, specializing in finance) from Ben-Gurion University.

Wolfson worked as Vice President of Finance at BioView Ltd.

(TASE:BIOV) from 2010 to

2019 and a senior auditor at Ernst & Young, from 2007 to 2010.

Wolfson is a certified public accountant in Israel and holds

a B.A in Economics and Accounting (with honors) and an MBA (with honors, specializing in finance) from Ben-Gurion University.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business